Mortgage Analysis

You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.99% on a 30-year mortgage. (You must use the FINANCIAL FUNCTIONS in EXCEL to calculate your answers.)

1. Discuss the interest savings associated with an extra payment of $300 per month.

2. Compare the costs and benefits of a 10% down payment versus a 20% down payment.