Jack bought his town-house 15-years ago in Melbourne and had taken out a loan for $350,000....

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Jack bought his town-house 15-years ago in Melbourne and had taken out a loan for $350,000. In that 15-years he has paid off $200,000, leaving him with a loan balance of $150,000. Since 2008 Melbourne's home prices have jumped in value, now his home is worth $1,000,000. a) Calculate his Home Equity. (2 marks) b) Jack is currently paying the home and contents insurance for $450,000 based on the cover taken 15 years ago. Explain the concept of under insurance to Jack and identify two implications of not revising the (3 marks) cover. Jack bought his town-house 15-years ago in Melbourne and had taken out a loan for $350,000. In that 15-years he has paid off $200,000, leaving him with a loan balance of $150,000. Since 2008 Melbourne's home prices have jumped in value, now his home is worth $1,000,000. a) Calculate his Home Equity. (2 marks) b) Jack is currently paying the home and contents insurance for $450,000 based on the cover taken 15 years ago. Explain the concept of under insurance to Jack and identify two implications of not revising the (3 marks) cover.

Answer rating: 100% (QA)

a To calculate Jacks Home Equity we subtract the remaining loan balance from the current value of hi... View the full answer