Suppose a home has an assumable existing trust deed and note in the
amount of $100,000 payable at $733.76/month including 8% interest
until paid. The note has about 27 years to go. Let's also assume that
the agent recommends the buyer and seller use an all inclusive trust
deed on the resale. After a down payment, the all inclusive trust deed
for $150,000 is created in favor of the seller. It is payable at
$1,500 per month including 9% interest until paid.
Under these circumstances what makes the All Inclusive Trust Deed so
dangerous to those unfamiliar with how it works? (The answer has more
to do with the math, than anything else. Any ideas?)