ipadvocate
New member
- Joined
- Oct 14, 2014
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Good God....thank you in advance for this site! My math skills are horrible and I need a quick answer to this (complicated?) question. Thanks in advance!
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In October 2005, John Brother and Sally Sister purchased Property Alpha with a fixed 20 yr mortgage. John owns 60% and Sally owns 40% of Alpha. The current monthly mortgage payment amount for Alpha are $286.27 and the interest rate is 8.375% (John pays 60% ($171.76) and Sally 40% ($114.51) of the monthly mortgage). In March 2014, the principal balance for Alpha was $25,525.95. That same month, John made a one-time payment of $15,315.57 to pay off his 60% of the principal balance on Alpha and, consequently, stopped paying his 60% share in Alpha.
In May 2006, John Brother and Sally Sister purchased Property Beta with a fixed 15 yr mortgage. John owns 20% and Sally owns 80% of Beta. The current monthly mortgage payment amount for Beta are $647.26 and the interest rate is 12.625% (John pays 20% ($129.45) and Sally 80% ($517.81) of the monthly mortgage). In January 2014, John made a one-time payment of $11,567.33 to pay off his 20% of the principal balance on Beta, and, consequently, stopped paying his 20% share in Beta. In September 2014, the principal balance for Beta was $44,895.16. That same month, Sally thought she made a one-time payment of $10,000 to pay down the principal balance on Beta. However, Sally accidentally made the $10,000 payment towards Alpha's mortgage, effectively paying off the remainder of the principal balance on Alpha (which discharged the loan).
John felt horrible for this accident and wants to provide additional monthly payments for Beta to help compensate Sally for her mistake. After all, if not for Sally effectively paying off the remainder of Alpha's mortgage, John and Sally would have had to continue making monthly payments on Alpha. Taking into account that the amount applied to principal and interest in any mortgage payment change over time, how best can John compensate Sally for her mistake? And for how long? What were the starting mortgage amounts for Alpha and Beta?
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Please let me know if you have any questions/need further info for this problem...thanks again!
ipadvocate
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In October 2005, John Brother and Sally Sister purchased Property Alpha with a fixed 20 yr mortgage. John owns 60% and Sally owns 40% of Alpha. The current monthly mortgage payment amount for Alpha are $286.27 and the interest rate is 8.375% (John pays 60% ($171.76) and Sally 40% ($114.51) of the monthly mortgage). In March 2014, the principal balance for Alpha was $25,525.95. That same month, John made a one-time payment of $15,315.57 to pay off his 60% of the principal balance on Alpha and, consequently, stopped paying his 60% share in Alpha.
In May 2006, John Brother and Sally Sister purchased Property Beta with a fixed 15 yr mortgage. John owns 20% and Sally owns 80% of Beta. The current monthly mortgage payment amount for Beta are $647.26 and the interest rate is 12.625% (John pays 20% ($129.45) and Sally 80% ($517.81) of the monthly mortgage). In January 2014, John made a one-time payment of $11,567.33 to pay off his 20% of the principal balance on Beta, and, consequently, stopped paying his 20% share in Beta. In September 2014, the principal balance for Beta was $44,895.16. That same month, Sally thought she made a one-time payment of $10,000 to pay down the principal balance on Beta. However, Sally accidentally made the $10,000 payment towards Alpha's mortgage, effectively paying off the remainder of the principal balance on Alpha (which discharged the loan).
John felt horrible for this accident and wants to provide additional monthly payments for Beta to help compensate Sally for her mistake. After all, if not for Sally effectively paying off the remainder of Alpha's mortgage, John and Sally would have had to continue making monthly payments on Alpha. Taking into account that the amount applied to principal and interest in any mortgage payment change over time, how best can John compensate Sally for her mistake? And for how long? What were the starting mortgage amounts for Alpha and Beta?
~~~~~~~~
Please let me know if you have any questions/need further info for this problem...thanks again!
ipadvocate