A young couple would like to purchase a new home using one of the following mortgages:
Mortgage no. 1: 10.5 percent interest with 5 discount points to be paid at time of closing
Mortgage no. 2: 11.5 percent interest with 2 discount points to be paid at time of closing
Assuming the couple could qualify for both mortgages, which of the following aspects should be considered in deciding between these two mortgages?
1. Gross income.
2. Estimated length of ownership.
3. Real estate tax liability.
4. Cash currently available.
a. (1) and (2) only.
b. (2) only.
c. (2) and (4) only.
d. (4) only.
e. (1), (2), (3), and (4)