A property is available for sale that could normally be financed with a fully amortizing $82,000 loan at a 10 percent ra

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A Property Is Available For Sale That Could Normally Be Financed With A Fully Amortizing 82 000 Loan At A 10 Percent Ra 1 (34.39 KiB) Viewed 118 times

A property is available for sale that could normally be financed with a fully amortizing $82,000 loan at a 10 percent rate with monthly payments over a 25-year term. Payments would be $745.13 per month. The builder is offering buyers a mortgage that reduces the payments by 50 percent for the first year and 25 percent for the second year. After the second year, regular monthly payments of $745.13 would be made for the remainder of the loan term. Required: a. How much would you expect the builder to have to give the bank to buy down the payments as indicated? b. Would you recommend the property be purchased if it was selling for $5,000 more than similar properties that do not have the buydown available? Complete this question by entering your answers in the tabs below. Required A Required B How much would you expect the builder to have to give the bank to buy down the payments as indicated? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Down payment < Required A Required B >
An appraiser is looking for comparable sales and finds a property that recently sold for $222,500. She finds that the buyer was able to assume the seller's fully amortizing mortgage, which had monthly payments based on a 7 percent interest. The balance of the loan at the time of sale was $147,500 with a remaining term of 15 years (monthly payments). The appraiser determines that if a $147,500 loan was obtained on the same property, monthly payments at the market rate for a 15-year fully amortizing loan would have been 8 percent with no points. Required: a. Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the cash equivalent value of the property? b. What is the cash equivalent value of the property if you assumed that the buyer is only expected to benefit from interest savings for five years because he would probably sell or refinance after five years? Complete this question by entering your answers in the tabs below. Required A Required B Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the cash equivalent value of the property? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Cash equivalent value < Required A Required B >
Required A Required B What is the cash equivalent value of the property if you assumed that the buyer only expected to benefit from interest savings for five years because he would probably sell or refinance after five years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Cash equivalent value < Required A Required B