I will assume that the rate is 5.35% per annum, compounded monthly, that is
i = .053/12 = .0041666..
let the balloon payment be x
925(1.0041666..^360 - 1)/.0041666... + x = 235,000(1.004166...)^360
solve for x
Tell me what you got.
If you get an answer of over $340,000 , don't be alarmed, it is correct.
This scenario is really unreasonable, the actual payments on this mortgage
should have been over $1300 per month, so this mortgage was beyond your
budget.
You need a 30-year, fixed-rate mortgage to buy a new home for $235,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 360-month loan. However, you can afford monthly payments of only $925, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $925?
1 answer
1 answer