Question

Margaret gat a 7/23 balloon mortgage and her initial payments were $915. She decided to refinance her balloon payment with a 30 year mortgage and her new payments were $895. What is the total financed cost she paid for her house? A. $337,320 B. $34,020 C. $399,060 D. $333,020

Answer 1

correct option is C. $399,060

Explanation:

given data

balloon mortgage = 7/23

initial payments = $915

time = 30 year

new payments = $895

solution

we know here that 7/23 is that loan has fixed rate = first 7 years.

so that initial payments for 7 years is here

initial payment = 7 × 12 × 915

initial payment = $76860

and

payments for 30 years when refinance her balloon

payments for 30 year = 30 × 12 × 895

payments for 30 year = $322200

so total financed cost paid for her house is

total financed cost = $76860 + $322200

total financed cost = $399,060

so correct option is C. $399,060