Question: You consider the purchase of a new house and plan to use a mortgage to partially finance the transaction. The purchase price of the house is $635,000. To avoid mortgage insurance, you will pay 20% with your own savings and use a 20-year fixed-rate mortgage for the balance. You believe you can lock in a mortgage rate of 4.2% (APR) and will make monthly mortgage payments, starting one month from now.

Quest 1- What is the monthly mortgage payment based on the terms of the loan?

Quest 2- What is the amount of each mortgage payment based on revised loan terms where you pay twice a month, but receive a quarter point (0.25%) discount on your (APR) interest rate?

Quest 3- How much in actual dollars - will you have paid off of your house after the second mortgage payment?