Question

Jennifer's condo is worth $400,000. She owes $300,000 on her 6% fixed-rate mortgage, compounds semi-annually that has three years remaining in its term. Jennifer pays $2,245 per month towards it. She also has the following debts:

• $25,000 unsecured line of credit at 7% with a monthly payment of $750.
• $30,000 on a student loan at 7%, with a monthly payment of $232.
• $15,000 credit card at 20% with a monthly payment of $253.

She has already used up her prepayment privileges for the year. She can get a new mortgage at 4% or add funds to her existing mortgage at a rate of 5%. Jennifer has a conventional mortgage charge against her property. Her lender charges $300 to discharge any mortgage and $500 to set up new legal documents for any mortgage.

Find the amortization of the current mortgage.

Answer 1

Jennifer's current mortgage amortization can be estimated by calculating the total amount paid over three years and considering the impact of the semi-annual compounding at a 6% interest rate on the remaining balance, although the exact formulas are not given in the question.

Step-by-step explanation:

To find the amortization of Jennifer's current mortgage of $300,000 with a 6% fixed-rate compounded semi-annually, we can use the information provided to determine how much of the loan she has paid off and how much remains. Since she pays $2,245 per month towards it, we can calculate the total amount paid over three years (36 months), which would be $2,245 * 36 = $80,820. Taking into account the semi-annual compounding at 6%, we can estimate the remaining balance. While the exact equations to calculate the remaining balance are not provided, the process would involve a present value or amortization calculation taking the payments and interest into account to find out how much of the principal amount remains after three years of payments.

The details like the fees for discharging the current mortgage and setting up new legal documents for any mortgage are not necessary for calculating the amortization of the current mortgage but are relevant if Jennifer is considering refinancing or adjusting her loan.