Business, 24.10.2021 01:40, BOYAWESOME0202

In 2015 the Smiths purchased a home for $250,000 with a loan of $200,000 at 4% for 30 years. In 2025 the Jones purchased the home for $350,000 but were able to assume the Smith's existing mortgage (the Jones' just took over the remainder of the existing loan).

The Jones' can will also obtain a new loan at 30 years, 9.5% fixed with a limit of an 80% total loan to value (of all debt combined).

If the Jones' can not assume the old loan, they will obtain a new loan at 80% LTV, 30 years, 9.5%.

What is the balance of the loan the Jones' will assume in 2025?

If the Jones' are able/willing to assume the old loan, what is the addition loan amount the Jones' will need to borrow in 2025?

If the Jones' assume the old loan what will be the total monthly payment for the Jones' on their new house?

If the Jones' were to assume this mortgage and hold this home for 30 years, what would be their monthly loan payment per month in year 22 of their ownership?

If the Jones' could not assume the prior mortgage, what would they pay as their monthly payment?

If the Smith's could increase the home price to make the Jones' indifferent (meaning the Jones' monthly payment would be exactly the same in either scenario) to assuming the loan with an increased purchase price or paying a lower price at the prevailing rate and terms, what would that higher purchase price be?

Answers: 2

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In 2015 the Smiths purchased a home for $250,000 with a loan of $200,000 at 4% for 30 years. In 20...