Could someone breakdown the Debt & Equity Information for this example so I can grasp an understanding of how it works.
Sale price: 7,000,000
Debt & Equity Information
Debt Type: Proposed
Interest Rate: 7.00%
Amortized Over: 30
Due In: 10
Annual Debt Service: $169,920
Down Payment: $1,400,000
Could you explain how the annual debt service was calculated from the numbers given, and what exactly is meant by “due in”.
Thank you
Normally, that means they will take the Prinicipal and amortize it over 30 years for payment purposes but any principal amount unpaid after 10 years will be due and payable as a “ballon payment”.
Basically, you will need to put $1.4M (20%) down and the seller will finance at 7% for 10 years but use a 30-year amortization schedule. After 7 years (84 payments), you will have a ballon payment of a little over $5.1M to pay the seller.
Keith
10 years, not 7 years, right?
Ooops…sorry…yes in 10 years and the payoff at that point would be around $4.8M…
Keith
What is it that you’re purchasing?