Janice and Ronald have decided to finance their first home with First American Bank. They are buying their home for $210,000 and making a 20 percent down payment. They will also be paying $3,000 in closing costs. First American has offered them the following mortgage alternatives: #of Monthly Caps Interest Rate Loan Term Points Payment S953 15.5 percent fixed 5 percent fixed 3 3.5 percent fixed 4 4.75 percent ARM 30 years 30 years 902 15 years $1,201 30 years 876 l percent/year 4 5 percent total $876 0 first two years/2 5 4.75 percent ARM 30 years percent per year thereafter