Secondary Mortgage Purchasing Company (SMPC) wants to buy your mortgage from the local savings and loan. The
Question:
Secondary Mortgage Purchasing Company (SMPC) wants to buy your mortgage from the local savings and loan. The original balance of your mortgage was $140,000 and was obtained 5 years ago with monthly payments at 10 percent interest. The loan was to be fully amortized over 30 years.
a. What should SMPC pay if it wants an 11 percent return?
b. How would your answer to part (a) change if SMPC expected the loan to be repaid after five years?
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Step by Step Answer:
Payments on the 140000 loan at 10 30 years are 122860 per month a Note that there are 25 years remai...View the full answer
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Related Book For 
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
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