Posted on 03/01/2011 10:39:31 PM PST by rebel_yell2
2.7545 is = to 27.545% Interest*** What on earth does that equality sign mean?***
I'll expound:
Mathematically that 2.7545 is equal to a 27.545% Interest rate, to wit:$167,000 at 27.545% Interest equals $467,000 at the end of forty years (167K x 1.27545%)
[I included the 100k Balloon payment over the 40 years for simplicity. As one way or another it has to be paid.]
In short, they're getting screwed.
Your intention is genuine but simple interest is resulting in a scary rate. The correct method would be based on the PV tables. A quick calculation (not detailed) says the rate should be betn 3.5 and 4 percent...
I don’t think you have the foggiest idea what you are talking about. The interest rate is somewhere between 5 and 5.5% on that loan depending on how much was allocated of that payment for pmi and taxes.
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