4. 30 year fixed mortgage rates are currently 5% and 15 year rates for fixed mortgages

are 4.65%. Assume $3500 in closing costs. What would the Lanleys monthly

payment and payback period be for each mortgage? Assume that closing costs are

paid from existing funds.

Residence: 4 bedroom home, original cost $500,000 FMV: $795,000 Mortgage: 8.5% fixed, 30 years in 1998 Mortgage balance: $260,000 Monthly mortgage payment (P&I): $3,100

a. 30 years

b. 15 years