Question
The following seven (7) questions (including this one) refer to these facts: You have purchased a new home for $250,000 and want to obtain a
The following seven (7) questions (including this one) refer to these facts: You have purchased a new home for $250,000 and want to obtain a conforming mortgage by putting down 20%.
Your mortgage provider offers you three alternatives:
A: a fixed-rate 30-year mortgage at 9% with no points
B: a fixed-rate 30-year mortgage at 8.25% with 2 points
C: a fixed-rate 15-year mortgage at 7% with no points
You will want to note the above mortgage terms on a separate piece of paper as you answer the subsequent, related questions.
What is the effective annual yield on mortgage A?
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