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Suppose that you want to buy a house with a purchase price of $200,000. The house has an assumable loan at 7.50% with 25 years
Suppose that you want to buy a house with a purchase price of $200,000. The house has an assumable loan at 7.50% with 25 years remaining on its original 30-year term. The loan had an original balance of $160,000. The current market rate on new 25-year mortgages is 9.50%. What is the financing premium as indicated by cash equivalence that you (the buyer) would be willing to pay for the assumable loan?
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