WRAP-AROUND MORTGAGES AND BLENDED INTEREST RATES: A TECHNICAL NOTE.

被引：0

作者：

Robison, Lindon J. ^{[1
]}

Koenig, Steven R. ^{[1
]}

机构：

[1] Michigan State Univ, MI, USA, Michigan State Univ, MI, USA

来源：

| 1600年 / 32期

关键词：

ENGINEERING;

D O I：

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中图分类号：

学科分类号：

摘要：

This study answers the question of how to find the blended interest rate on WAM (Wrap-Around Mortgage) loans which permits the lender to earn the market interest rate on his new loan while permitting the borrower to maintain the advantage of his below-market interest rate on his original loan. The blended rate is inferred to as the 'break-even' blended rate. D. Liteplo illustrates how this rate can be calculated by way of trial and error search (the internal rate of return of the WAM loan). The authors provide instead a precise method for calculating the blended rate as well as WAM payments.

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