The purchase price was $1.284 million. The first mortgage is a $963,000, 75% LTV loan with an interest rate of 6.5%, Â which is fixed for five years and amortized over 30 years. After the initial five-year fixed term the borrower has an option to roll over the loan into another five-year fixed term, or allow the loan to become adjustable. If the loan is rolled over into a second five-year fixed period, the same five-year fixed option is available again at the end of the tenth year.
The seller gave the buyer a second mortgage of $128,400, which is interest-only for five years at an interest rate of 5%. Â
The seller's second enabled the buyer to purchase this property with only 15% down.