You want to buy an 85,000 house with , $17,000 available for an initial deposit. The following down payment options are being considered.
option #1: Obtain a new standard mortgage at an APR of 4.5% compound monthly and to a term of 30 years.
option #2: Assume the buyer's old mortgage (which is an FHA loan) at a compound interest of 4% monthly, for a remaining term of 25 years (from an original term of 30 years), with a balance remaining of $48,197, equivalent to a monthly payment of $253.34. A second mortgage can be obtained from the remaining balance, $19,903, from a credit compound monthly and with a repayment period of 10 years.
A) Establish the chart for each of the three loans.
B) what is the annual effective interest for option 2? ( For the first 10 years and the last 15 years)
C) Calculate monthly payments for each option for the duration of the mortgage and show the calculations of the first 10 years and the last 15 years.
D) Calculate the payment of total interest for each option.