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I need answers for parts 2b. and 2c. I NEED ANSWERS ASAP!! 2. I decided to buy a house for $289,900. I have enough in
I need answers for parts 2b. and 2c. I NEED ANSWERS ASAP!!
2. I decided to buy a house for $289,900. I have enough in savings to put 10% down on the house and pay all closing costs. If I take out a loan at 4.5% annual interest for 30 years, how much will my monthly mortgage payment be? a. If I increase my mortgage payment by $100, how much earlier will I pay off the house? How much interest will I save paying? Often lenders will offer "points" to the borrower in order to reduce the interest rate of the loan (often referred to as paying down the loan). One point is equal to 1% of the loan amount that is paid, up front, to the lender as a fee in exchange for reducing the interest rate on the loan by 0.25%. b. If I have the option to "buy a point and reduce my interest rate, how much will my payment be? Will it be worth it to buy a point? If yes, explain why (this means tell me things like how much money I might save, etc)? If not, explain why not (this means tell me things like how much money it would cost me, etc)? C. Suppose I plan on buying the home for the purpose of living in it for 7 years and then selling it so I can move to Hawaii for my retirement. If I plan on selling the house in 7 years, would it still be worth me "buying a point" at the time of purchase? Taking all things into consideration, how much will I save or lose if I purchase the point and sell in 7 yearsStep by Step Solution
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