Imagine that you are given two loan alternatives for a parcel of property you are purchasing, as follows:

Loan #1 is a loan for $215,000, at a rate of 6%.

Loan #2 is the opportunity to take out a 1st and 2nd mortgage, for $180,000 (at a rate of 5.75%) and $35,000 (at a rate of 6.35%), respectively.

Please describe the process you would use to evaluate these two alternatives. You do not have to solve the problem as to which loan "package" is the most desirable. Just describe the process you would take to determine which alternative is the best choice.