Bud is offering a house for sale for $180,000 with an assumable loan originated 5 years ago for $140,000 at 8.75% over 30 years. Kelsey is interested in buying the property and can make a $20,000 down payment. A second mortgage can be obtained for the remaining balance at 12.5% for 25 years. What is the effective cost of the combined loans for Kelsey?

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