Question
Mortgage Market : You plan to purchase a house using a 30-year fixed-rate mortgage loan from your local bank. The mortgage loan amount is $120,000
Mortgage Market: You plan to purchase a house using a 30-year fixed-rate mortgage loan from your local bank. The mortgage loan amount is $120,000 and the bank offers you two options for the payment:
Option (1) Mortgage Loan rate of 8% (APR) with monthly payments and monthly compounding and zero points.
Option (2) Mortgage Loan rate of 7.75% (APR) with monthly payments and monthly compounding but with 2 points.
Which is the better option? (show all calculations)
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Introduction To Mathematical Finance Discrete Time Models
Authors: Stanley R. Pliska
1st Edition
1557869456, 9781557869456
