What is the first month's interest on a fixed-rate loan at 7% for a home costing $360,000 with an LTV ratio of 80%?

To calculate the first month's interest on a fixed-rate loan, you first need to determine the loan amount based on the purchase price and the loan-to-value (LTV) ratio. In this case, the home costs $360,000 and the LTV ratio is 80%.

Calculating the loan amount involves multiplying the home price by the LTV ratio:

Loan Amount = Home Cost × LTV Ratio
Loan Amount = $360,000 × 0.80
Loan Amount = $288,000

Next, to find the monthly interest payment, you first need to determine the annual interest for the loan and then divide it by 12 to get the monthly interest. The interest rate given is 7%.

Annual Interest = Loan Amount × Interest Rate
Annual Interest = $288,000 × 0.07
Annual Interest = $20,160

Finally, to find the monthly interest, you divide the annual interest by 12:

Monthly Interest = Annual Interest / 12
Monthly Interest = $20,160 / 12
Monthly Interest = $1,680

This calculation demonstrates that the first month's interest on this fixed-rate loan at 7% for a home costing $360,000 with an 80%