3 ms·
IIUC, the somebody spends 300k (for the 2.5% mortgage) and then an additional 500k (to you at 4%) to ultimately sell a mortgage for 400k which is a net 400k los
by lesuorac 3y ago
IIUC, the somebody spends 300k (for the 2.5% mortgage) and then an additional 500k (to you at 4%) to ultimately sell a mortgage for 400k which is a net 400k loss but they also now own the original house.
- bryanlarsen 3y agoThey spend 300k for the original mortgage, and advance you another 500k at 4% for the new mortgage. At this point you owe them $1M. You then pay them 500k from the proceeds of selling the original house. They sell the new mortgage on for 400k, netting $100k. You also are ~$100K better off than if you had to pay $500K to get rid of the original mortgage and then had to borrow $500K at 7% for your new house.