Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An appraiser is looking for comparable sales and finds a property that recently sold for $ 2 0 0 , 0 0 0 . She

An appraiser is looking for comparable sales and finds a property that recently sold for $200,000. She finds that the buyer was able to assume the sellers fully amortizing mortgage which had monthly payments based on a 7 percent interest rate. The balance of the loan at the time of sale was $140,000 with a remaining term of 15 years (monthly payments). The appraiser determines that if a $140,000 loan was obtained on the same property, monthly payments at the market rate for a 15-year fully amortizing loan would have been 8 percent with no points. Assume that the buyer expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the cash equivalent value of the property?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance

Authors: Harvey S Rosen

6th Edition

0072374055, 978-0072374056

More Books

Students also viewed these Finance questions

Question

What is the effect of word war second?

Answered: 1 week ago