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A borrower finds that the incremental cost of borrowing an extra $10,000 in a first mortgage loan is 14%. A second mortgage loan can be

A borrower finds that the incremental cost of borrowing an extra $10,000 in a first mortgage loan is 14%. A second mortgage loan can be obtained at 15% in combination with a smaller (by $10,000) first mortgage. The borrower would be better off by borrowing with the combination of the smaller first mortgagee loan and a second mortgage loan for $10,000.

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