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A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 6% interest for 30 years, with 6 points to
- A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 6% interest for 30 years, with 6 points to be included in closing costs. Loan B would be made for the same amount, but for 7% interest for 30 years, with 2 points to be included in the closing costs. Both loans will be fully amortizing.
- If the loan is repaid after 20 years, which loan would be the better choice?
- If the loan is repaid after five years, which loan is the better choice?
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