I’m on the section that asks about my parent’s home. There’s one question that has stumped me. “Amount owed on the primary mortgage for this home.” Not sure what it’s asking?
Do your parents own a home or rent? If they own a home they likely have a mortgage. They should be able to tell you the mortgage balance or if it is paid off. If your parents rent their home the question is irrelevant.
They own and are currently paying off the home we live in. Here is the list of questions and my answers
Monthly housing payment*
1200
Home purchase year*
2014
Home purchase price*
178000
Current market value*
190000
Amount owed on home*
382800
Amount owed on the primary mortgage for this home
?
This makes no sense. How can you owe $328,000 on a home that cost $178,000 three years ago? You need to talk to your parents to clarify this.
If there’s only one mortgage on the house, then the amount owed on the home should equal the amount owed on the primary mortgage. If there are more than two mortgages on the home, only one of those mortgages is primary, and the amount owed on the primary mortgage will be less than the amount owed on the total of all the mortgages.
And I agree with TomSrOfBoston. Owing more than $382k on a house that was purchased for $178 and has a current market value of $190k is highly unusual and very likely not accurate.
That’s probably the amount the will be paid if all interest is paid as scheduled. That is not the amount owed on the house.
What Profile is asking you to do is to tell them that of the total Amount Owed on the Home, how much of that is actually for the mortgage your parents originally (including accrued & capitalized interest since then) took as a loan to buy the house versus how much of that amount is from additional amounts added to that loan for things like: building an addition to the home, installing an in-ground pool, etc. BTW, that differentiation helps schools to determine how much spending power your family truly has.