Question

Kristi got a 7/23 balloon mortgage and her initial payments were $895. She decided to refinance her balloon payment with a 30-year mortgage and her new payments were $873. What is the total financed cost she paid for her house? A) $333,020 B) $399,060 C) $34,020 D) $316,128

Answer 1

Answer: 389,460 - Apex

Answer 2

Total financed cost is: $389,460

Explanation:

The 7/23 name means that the loan has a fixed rate for the first seven years.

Now Kristi's initial payments for 7 years will be =

`7*12*895=75180` dollars

Then she decided to refinance her balloon payment with a 30-year mortgage and her new payments were $873.

So, payments for 30 years will be =

`30*12*873=314280` dollars

Now, the total financed cost she paid for her house will be =

`75180+314280=389460` dollars

This option is not given, but this is the correct answer.