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Part $8$: Equity Computation $--$ Show your work

Pablo Pecard owned his home for $13$ years. As such, he has paid off a significant amount of his original loan.

He has also enjoyed a nice appreciation in the value of his home. Indeed, life is good.

Pablo has now decided to take out a second mortgage in the amount of $$65,000.$ An appraisal was required

for the loan application. It is provided below. The interest rate is $6\mathrm{.}75\%$ on the new loan and he choses to amortize it over $15$ years.

Original Purchase Price:

$312$ Prescott Street....... $$180,000$

Existing Mortgage:

Original Loan: $$125,000$@$7\mathrm{.}0\%$ for $30$ years

Monthly payment: $$831\mathrm{.}63$

Current Appraisal:

Current Mortgage Balance: $$99,044$

Estimated fair market value for the property located at

$312$ Prescott Street..... $$345,000$

$8$a$.$ What do we mean by equity in a home?

Portion that the homeowner actually owns

$8$b$.$ What was Pablo's equity in his house on the date of purchase?

$

Show work here:

Home equity $=$ fair market value $-$ mortgage balance. $345000-99044$

$8$c$.$ What is his current equity $($before taking the second mortgage$)?$

$

Home equity $=$ tair market vlaue $-$ mortgage balance. $345000-99044$

$8$d$.$

How much equity will Pablo have in the house after taking out the second mortgage?