Question

Patricia got a 5/25 balloon mortgage and her initial payments were $965. She

Answer 1

Answer:

$390,900

Step-by-step explanation:

Given:

Initial payment = $965

New rapayment = $925 when she decided to refinance her ballon payment with a 30 year mortgage

In this case, a 5/25 ballon mortgage simply means loan repayment for the first 5 years is at a fixed rate.

Which means the total amount she paid in the first five years was=

12 * 5 * $965 = $57,900

When she refinanced the payment with a 30 year mortgage, her total payment = $925 * 12 * 30years = $333,000

Total financed cost Patricia paid =

$57,900 + $333,000 = $390,900