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Joshua and Jim have owned a property for 15 years, the value of which is now $200,000.The balance on the original mortgage is $100,000, and the...

Joshua and Jim have owned a property for 15 years, the value of which is now $200,000.The balance on the original mortgage is $100,000, and the monthly payments are $1,100, with 15 years remaining. They would like to obtain $50,000 in additional financing. A new first mortgage can be obtained at a 5% rate and a second mortgage for $50,000 at a 7% rate with a 15-year term. Alternatively, a wraparound loan for $150,000 can be obtained at a 6% rate and a 15-year term. All loans are fully amortizing. Which alternative should be selected?
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Dear Student Please find... View the full answer

Finance- 8098867.xls

Wraparound loan
150,000
6%
15 First Mortgage
100,000
5%
15 Second Mortgage
50,000
7%
15 0.50%
180
$1,265.79 Total Monthly payment - Wraparound loan 0.42%
180
$790.79 Monthly payment - First...

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