Question
You want to buy a house that costs $270,000. You have $27,000 for a down payment, but your credit is such that mortgage companies will
You want to buy a house that costs $270,000. You have $27,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $243,000. However, the realtor persuades the seller to take a $243,000 mortgage (called a seller take-back mortgage) at a rate of 6%, provided the loan is paid off in full in 3 years. You expect to inherit $270,000 in 3 years, but right now all you have is $27,000, and you can afford to make payments of no more than $21,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.) What would the loan balance be at the end of Year 3? Do not round intermediate calculations. Round your answer to the nearest cent. $ What would the balloon payment be? Do not round intermediate calculations. Round your answer to the nearest cent. $
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