Question
Consider the following pair of loan options for a $195,000 mortgage. Calculate the monthly payment and total closing costs for each option. Explain which is
Consider the following pair of loan options for a $195,000 mortgage. Calculate the monthly payment and total closing costs for each option. Explain which is the better option and why.
Choice1: 20-year fixed rate at 6.5% with closing costs of $1700 and 1 point.
What is the monthly payment for choice1
What is the total closing cost for choice1
Why might choice 1 be the betterchoice?
A.
The closing costs are higher.
B.
The monthly payment is lower.
C.
The closing costs are lower.
D.
The monthly payment is higher.
Choice2: 20-year fixed rate at 6.25% with closing costs of $1700 and 3 points.
What is the monthly payment for choice2?
What is the total closing cost for choice2?
Why might choice 2 be the betterchoice?
A.
The closing costs are higher.
B.
The monthly payment is lower.
C.
The closing costs are lower.
D.
The monthly payment is higher.
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Fundamentals of Investments Valuation and Management
Authors: Bradford Jordan, Thomas Miller
7th edition
978-0078096785, 78096782, 978-0077861636, 77861639, 978-0078115660
