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Homework answers / question archive / You are an investor that is looking to purchase distressed property or notes
You are an investor that is looking to purchase distressed property or notes. You come across a $100,000 mortgage loan at 4.00% on a 30-year amortization schedule which closed five days ago. Sudden changes in the market have driven interest rates to 6.00%. The investor is willing to sell the note at a 15% discount to the original face amount of $100,000. a. Would you buy the Note? b. Would you buy the Note if the discount was 25%?