Patricia got a 5/25 balloon mortgage and her initial payments were $965. She decided to refinance her balloon payment with a 30-

Question

Patricia got a 5/25 balloon mortgage and her initial payments were $965. She

decided to refinance her balloon payment with a 30-year mortgage and her

new payments were $925. What is the total financed cost she paid for her

house?

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Eliza 2 days 2021-10-12T10:51:55+00:00 1 Answer 0

Answers ( )

    0
    2021-10-12T10:53:16+00:00

    Answer:

    $390,900

    Step-by-step explanation:

    Given:

    Initial payment = $965

    New rapayment = $925 when she decided to refinance her ballon payment with a 30 year mortgage

    In this case, a 5/25 ballon mortgage simply means loan repayment for the first 5 years is at a fixed rate.

    Which means the total amount she paid in the first five years was=

    12 * 5 * $965 = $57,900

    When she refinanced the payment with a 30 year mortgage, her total payment = $925 * 12 * 30years = $333,000

    Total financed cost Patricia paid =

    $57,900 + $333,000 = $390,900

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