A house is selling for $180,000 and the seller owes $140,000. The borrower is short $40,000 for the down payment, but the seller is willing to carry back $20,000 of the $40,000 equity as a second mortgage as long as the buyer agrees to pay $20,000 cash. This type of financing by the seller is called subprime financing. b.junior financing. c.high-cost financing. d.senior financing.
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A house is selling for $180,000 and the seller owes $140,000. The borrower is short $40,000 for the down payment, but the seller is willing to carry back $20,000 of the $40,000 equity as a second mortgage as long as the buyer agrees to pay $20,000 cash. This type of financing by the seller is called
subprime financing.
b.junior financing.
c.high-cost financing.
d.senior financing.
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- A borrower has secured a 30 year, $150,000 loan at 7% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 5%, what would the investor be willing to pay for the loan? (Correct Anwser: C) A:$75,000 B:$111,028 C:$118,478 D:$168,646 How to solve this problem? Give typing answer with explanation and conclusionA customer wants to buy a house with a cash value of 1,000,000 riyals, and the customer will pay 40% of the house’s price in cash, and the bank will finance 60% of the house’s value. If the customer wants to pay the rest of the amount in installments over a period of ten years at a profit rate of 7.5% annually, then the total value of the house will be That the customer pays 1.75 million riyals (true or false)??Suppose you want to buy a car. You have surveyed the dealers' newspaper advertisements, and the one shown has caught your attention. You can afford to make a down payment of $2,678.95, so the net amount to be financed is $20,000.(a) What would the monthly payment be?(b) After the 25th payment, you want to pay off the remaining loan in a lumpsum amount. What is this lump sum?
- A house is selling for $150,000 a deposit of $20,000 was made when sales contract was signed. The down payment is 30% and the balance will be financed with a 25 year mortgage at 4.25% and four discount points. If the sellers are responsible for the brokers commission of 6% of purchase price, $$1300 in other closing cost, and existing mortgage with balance of $40,000 what proceeds will the seller receive? $108,700 $99,700 $101,000 $69,450You want to buy a $170000 home. You plan to pay $51000 as a down payment, and take out a 15 year loan at 5.25% interest for the rest. After 6 years, you decide to pay off the entire loan.a) What is the amount of the payment?$ b) What is the outstanding principal after 6 years?$c) If the bank charges 2 points on the loan, what is the amount charged for points?$d) If the bank charges 2 points on the loan, what is the true interest rate?$ TVM SOLVERCtenanthe Plant Co. borrows money to buy some new green houses. To do so, Ctenanthe borrows $750,000 in a 15-year fixed mortgage. To record the borrowing, Ctenanthe should. debit mortgage payable for $750,000 debit cash for $750,000 Ctenanthe dooes not need to record anything until the first payment is due, since thi is long-trm borrowing. credit cash for $750,000
- ank A has offered you a loan worth $20,000 for 180 days whereas bank B offered you the same loan but as a compensating balance loan. Which offer would you take and why, explain Why could have bank B offered a compensating balance loan.You want to buy a $170000 home. You plan to pay $34000 as a down payment, and take out a 20 year loan at 4.5% interest for the rest. After 14 years, you decide to pay off the entire loan.a) What is the amount of the payment? b) What is the outstanding principal after 14 years?c) If the bank charges 3.5 points on the loan, what is the amount charged for points?d) If the bank charges 3.5 points on the loan, what is the true interest rate?Van Buren Resources Inc. is considering borrowing $100,000 for 182 days from its bank. Van Buren will pay $6,000 of interest at maturity, and it will repay the $100,000 of principal at maturity. a. Calculate the loan’s annual financing cost. b. Calculate the loan’s annual percentage rate. c. What is the reason for the difference in your answers to Parts a and b?
- A house is sold with an assumable $156,000 below-market loan at 10% for a term of 15 years by a construction company. Current rates are 12% for 15 year mortgages. If the house in the market without any special financing is sold for $240,000, what is the cash-equivalent value of the house of the construction company? (Answer is rounded)Mr. and Mrs. Johnson wants to borrow $10,000 to renovate their kitchen. Bank ABD offered them a two-year traditional loan with 4.6% interest rate. Bank CFG offered them a two-year fixed payment loan of equal installment of $5,400 per year. Which of the following statements is correct? Group of answer choices a) It is less costly for Mr. and Mrs. Johnson to borrow with the fixed payment loan. b) There isn't enough information to determine which loan is more costly. c) It is less costly for Mr. and Mrs. Johnson to borrow with the traditional loan. d) The two loans are equally costly.[This is a loan payment problem. Also considered a time value of money or TVM problem. You need to solve for PMT.] Marco is buying a home. The selling price is $240,000. The seller is paying a 6% commission, the bank is requiring a 20% down payment, Marco has a credit score of 750, the loan interest is 5.5%, and the length of the loan is 30 years. a. What is the monthly house payment for principal and interest? (Answer in dollars). b. What is the total Marco will pay for the house over the 30 years? (Answer in dollars).