6.

A lawyer is trying to decide between two mortgage options to finance the cost of

a $625,000 house.

Find the monthly payments and the total interest paid for

both options.

a.

The lawyer pays a 5% down payment and finances the house with

a 30 year mortgage at 6.75% interest. No points are paid at closing.

b.

The lawyer pays a 30% down payment and finances the house with a 15

year mortgage at 6.25% interest. No points are paid at closing.

c.

Which option do you think is better for the lawyer?