(30 points) Assume you buy a home for $150,000 and this is also the appraisers...
80.2K
Verified Solution
Link Copied!
Question
Finance
(30 points) Assume you buy a home for $150,000 and this is also the appraisers opinion of value at origination. You get a residential FRM with monthly payments for 30 years at a contractual interest rate of 3.64%. The LTV is 95% and the lender requires PMI. In what month will PMI automatically cancel (i.e. OLB/V(0) = 78%)? In what month can you call the bank and see whether they will cancel the PMI (i.e. OLB/V(0) = 80%)? If homes like yours appreciate at 3%/year on average, in what month can you get an appraisal and hopefully have the bank cancel the PMI (i.e., OLB/V(q) = 80%)? Hint: V(q) is the likely value of your home q months from origination. Excel will be required to complete this part of the question.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
