Clint Barton is purchasing a $800,000 home and requires a Canadian mortgage of $280,000 paid monthly. He has two options

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Clint Barton Is Purchasing A 800 000 Home And Requires A Canadian Mortgage Of 280 000 Paid Monthly He Has Two Options 1 (32.65 KiB) Viewed 37 times

Clint Barton is purchasing a $800,000 home and requires a Canadian mortgage of $280,000 paid monthly. He has two options: Option 1: Assume the seller's (Sam Wilson), current outstanding mortgage of $240,000 amortized over 25 years, at a rate of 5% with a remaining term of 3 years. The remaining amortization is 23 years. The balance of the mortgage requirement of $40,000 would be a second mortgage at 9%. Option 2: A new first mortgage for $280,000 at 7%. a) What is the monthly payment with option 1? b) What is the outstanding balance at the end of the term for option 17 c) What is the monthly payment with option 2? d) What is the outstanding balance at the end of the term for option 2? e) Assess the two options. Which option is better for Clint if his focus is on minimizing negative cash flow? For full marks, show inputs to your calculations and 1 sentence qualitative answer to the question.