Suppose you were offered a choice between a 30-year mortgage at 6% with zero points or a 5.5% mortgage with 2 discount points. Assume you want to borrow $200,000. How many months will you have to live in the house to make it worthwhile to take the 5.5% mortgage with the 2 points?

Given two mortgage options: 1) 30-year fixed at 6% with zero points, and 2) 30-year fixed at 5.5% with points. Assume a $200,000 mortgage. If you intend to live in your house for 10 years, what is the maximum amount of points that you would be willing to pay?

a) Compute the monthly payment on a $300,000 30-year mortgage at a rate of 5%. b) What is the first monthly principal payment in (a)?

c) What is the first monthly interest payment in (a)?

Again, assume you have a 300,000 30-year mortgage at a rate of 5%. a) What are the total principal payments for first year?

b) What are the total interest payments for the first year?

Now assume you have a 300,000 15-year mortgage at a rate of 4.5%. a) What are the total principal payments for the first year?

b) What are the total interest payments for the first year?