& MORTGAGOR INTERESTS
elements under this standard are:
interpret outcomes of analysis
analyse data on subject mortgage
determine mortgagee's or mortgagor's interests value
record value, analytical approaches used and qualifications required.
formulae can be used to determine the repayments of a real estate
mortgage. The formula used is derived from the present value of 1 pa
(PVPMT) because mortgage repayments can be equated to rent (PMT), and
the loan amount to the market value or present value of an investment
the mortgage repayments for a home loan of $400 000 over 20 years at
= (1 PV)/ (i/100)
is the PV of $1 per annum.
the mortgage repayments:
is the payment (PMT) for a PV of $400 000?
400 000 = 1: 7.469
= 400 000/7.469 = $53 550 pa
well as the lessee and lessor, the mortgagee and mortgagor have an
interest in a mortgaged property.
the mortgagee and mortgagor interests in the above house at the end
of 5 years.
mortgagee's Interest is the PVPMT of the remaining future loan
5 years the mortgagor will owe 15 years of repayments:
the PVPMT for n =15
= (1 0.1827)/0.12 = 6.811
by the mortgage repayments
6.811 * 53 550 = $364 730
the mortgagee's interest is $364 730 which is the amount owing on the
loan at the end of 5 years.
mortgagor's interest in the property is market value less the
the market value
270 = MORTGAGOR'S INTEREST
mortgagor is able to obtain a second mortgage on this interest.
annual rental equivalent (ARE)
equivalent cash price