Question

Troy has a 7/23 balloon mortgage on his $260,000 home. He has been

making payments of $1323 each month and will have a balloon payment due

for the amount of $198,569. If he decides to make the balloon payment, what

will be the total financed price he paid for his home?

Answer 1

B

Step-by-step explanation:

Answer 2

$309,701

Step-by-step explanation:

A balloon mortgage refers to any mortgage that doesn't fully amortize.

In a 7/23 Balloon mortgage - the rate is fixed for a period of 7 years and then converts to a new fixed rate for the remaining 23 years.

If Troy has been paying $1323 per month for 7 years.

Total Amount already paid= $1323 X 7 X 12 = $111,132

Balloon Payment Due = $198,569

If he decides to make the payment, the total financed price paid for his home = Total of Amount Paid per Month + Balloon Payment

=111132+198569

=$309,701