assessment 1 - task 3 mortgage payment? How?!
Thanks in advance!
Comments
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£6,000,000 x 3.5% = £210,000 = interest per year.
£210,000 x 20 = £4,200,000 = total interest.
£4,200,000 + £6,000,000 = £10,200,000 = total amount of loan.
£10,200,000 x 80% = £8,160,000 = mortgage 80% of loan.
£8,160,000 / 20 = £408,000 per annum.
£408,000 / 12 = £34,000 per month.
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> @kellypreston said:
> £6,000,000 x 3.5% = £210,000 = interest per year.
> £210,000 x 20 = £4,200,000 = total interest.
> £4,200,000 + £6,000,000 = £10,200,000 = total amount of loan.
> £10,200,000 x 80% = £8,160,000 = mortgage 80% of loan.
> £8,160,000 / 20 = £408,000 per annum.
> £408,000 / 12 = £34,000 per month.
Thanks so much!0 -
> @kellypreston said:
> £6,000,000 x 3.5% = £210,000 = interest per year.
> £210,000 x 20 = £4,200,000 = total interest.
> £4,200,000 + £6,000,000 = £10,200,000 = total amount of loan.
> £10,200,000 x 80% = £8,160,000 = mortgage 80% of loan.
> £8,160,000 / 20 = £408,000 per annum.
> £408,000 / 12 = £34,000 per month.
Howcome interest is charged on the full amount if only 80% is financed via the mortgage? Assuming the other 20% is funded by other means?? Why would interest be charged on an amount not funded by the mortgage??0 -
If you read the additional information it says:
"the mortgage is for a 20 year period and interest is charged on the INITIAL balance at 3.5%"
So thats why you use the full amount (6M) because that was the initial amount.
I hope this makes sense?0 -
Hi.kellypreston said:If you read the additional information it says:
"the mortgage is for a 20 year period and interest is charged on the INITIAL balance at 3.5%"
So thats why you use the full amount (6M) because that was the initial amount.
I hope this makes sense?
I understand the question, however I don't think it logically makes sense. It's like if you were to purchase a car for £1,000 and you place a £200 deposit (therefore 80% LTV) and then paying interest on your money that was contributed. It's not the question that's causing confusion but the concept that you would charge interest on the other 20%. If the remaining 20% was funded by a bank overdraft then there would be the overdraft interest in addition to the mortgage interest.
Can you see where I am coming from?1 -
I also have some problems with homework tasks. I'm happy I've found this forum. before that, I've used this service when I need some assistance with research paper etc0
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@Lucygsy Totally understand, it makes no sense at all0
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This is why it is better to go to a broker instead of worrying about where the money came from. Or you can collect data on mortgage programs in the region yourself. Some of the information is available on the banks' websites, and some are only available after you make a phone call or visit a branch. Compare interest rates, possible mortgage repayment terms, calculate the number of overpayments, and of course, Study your finances. Yes, I agree this process is time-consuming, but if you want an answer to your question, it is worth doing it yourself or contacting Mortgage Advice Derby.0
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hello0
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The process is time-consuming, and you need to have patience with it.0
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The way Kelly has calculated it is different from myself, but it comes to the same answer.....Lucygsy said:> @kellypreston said:
> £6,000,000 x 3.5% = £210,000 = interest per year.
> £210,000 x 20 = £4,200,000 = total interest.
> £4,200,000 + £6,000,000 = £10,200,000 = total amount of loan.
> £10,200,000 x 80% = £8,160,000 = mortgage 80% of loan.
> £8,160,000 / 20 = £408,000 per annum.
> £408,000 / 12 = £34,000 per month.
Howcome interest is charged on the full amount if only 80% is financed via the mortgage? Assuming the other 20% is funded by other means?? Why would interest be charged on an amount not funded by the mortgage??
The loan value is actually £6,000,000 x 80% = £4,800,000
Making annual interest £4,800,000 x 3.5% = £168,000
Total interest £168,000 x 20 = £3,360,000
Total loan £3,360,000 + £4,800,000 = £8,160,000
Annual cost £8,160,000 / 20 = £408,000
Monthly cost £408,000 / 12 = £34,000
Doesn't matter if you calculate the 80% at the start or after you have calculated the interest charge, but this is the way I've been taught to work it out (by a mortgage advisor friend).AAT Member. Foundation - Distinction 94%Advanced - Distinction 90%Professional - Merit 81%0
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