the kerwins are selling their home in order to assist in providing their input for a house they have decided to purchase for $16,000,000. the sale agreement on the house being purchased requires a deposit of 20 percent plus closing costs of $800,000 to be paid on signing on August 31,2018. the balance of the purchase price (second deposit) that is not being financed by mortgage loan is due on September 30,2018, the date on which the sale is to be closed. currently, the kerwins have a mortgage balance of @2,000,000 on their old home, which has appraised at $8,000,000. a purchaser has been identified but the proceeds from the sale of this property will not be received until december 30,2018. the kerwins have been pre-approved by local building society to qualify for a 25-year mortgage of $11,000,000 on the new house. this will attract an interest of 5.50% per annum with monthly compounding. in the mean time rbnc bank ltd, a commercial bank, is offering a bridging loan at a rate of 8.50% per annum and the kerwins will only use the minimum amount needed of this loan. the kerwins also have savings of $250,000. how much cash must the kerwins pay for signing the sale agreement for their new house
the kerwins are selling their home in order to assist in providing their input for a house they have decided to purchase for $16,000,000. the sale agreement on the house being purchased requires a deposit of 20 percent plus closing costs of $800,000 to be paid on signing on August 31,2018. the balance of the purchase price (second deposit) that is not being financed by mortgage loan is due on September 30,2018, the date on which the sale is to be closed. currently, the kerwins have a mortgage balance of @2,000,000 on their old home, which has appraised at $8,000,000. a purchaser has been identified but the proceeds from the sale of this property will not be received until december 30,2018. the kerwins have been pre-approved by local building society to qualify for a 25-year mortgage of $11,000,000 on the new house. this will attract an interest of 5.50% per annum with monthly compounding. in the mean time rbnc bank ltd, a commercial bank, is offering a bridging loan at a rate of 8.50% per annum and the kerwins will only use the minimum amount needed of this loan. the kerwins also have savings of $250,000. how much cash must the kerwins pay for signing the sale agreement for their new house?
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