A house can be purchased for $120,000, and you have $30,000 cash for a down payment....

 

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A house can be purchased for $120,000, and you have $30,000 cash for a down payment. You are considering the following two financing options: ● Option 1. Getting a new standard mortgage with a 8.5% (APR) interest and a 30-year term. Option 2. Assuming the seller's old mortgage, which has an interest rate of 6.5% (APR), a remaining term of 25 years (the original term was 30 years), a remaining balance of $75,236, and payments of $508 per month. You can obtain a second mortgage for the remaining balance ($14,764) from your credit union at 10% (APR) with a 10-year repayment period. (a) What is the effective interest rate of the combined mortgage? The effective interest rate of the combined mortgage is%. (Round to two decimal places.) ● A house can be purchased for $120,000, and you have $30,000 cash for a down payment. You are considering the following two financing options: ● Option 1. Getting a new standard mortgage with a 8.5% (APR) interest and a 30-year term. Option 2. Assuming the seller's old mortgage, which has an interest rate of 6.5% (APR), a remaining term of 25 years (the original term was 30 years), a remaining balance of $75,236, and payments of $508 per month. You can obtain a second mortgage for the remaining balance ($14,764) from your credit union at 10% (APR) with a 10-year repayment period. (a) What is the effective interest rate of the combined mortgage? The effective interest rate of the combined mortgage is%. (Round to two decimal places.) ●

Answer rating: 100% (QA)

ANSWER The effective interest rate of the combined mortgage is 816 ... View the full answer