There are a variety of financing options to purchase a home. Below are several different loans with their respective detail. Answer the following questions and then write an analysis of your findings. Property Value $350,000.00 Increase in rate if 2nd Mortgage used 1.50%

[1] [2] [3] [4] [5] [6] [1] 30 Year Fixed Rate [2]15 Year Fixed Rate [3]5-1 ARM [4]7-1 ARM [5]2 Year Interest Only with Balloon [6]2nd Mortgage Term: [1]30 Years [2]15 Years [3]5-30 [4]7-30 [5]2-30 [6]15 Years Interest Rate: [1]4.25% [2]3.25% [3]3.50% [4]3.65% [5]5.00% [6]6.50% Required Percent Down: [1]20.00% [2]20.00% [3]20.00% [4]20.00% [5]20.00% [6]5.00% Closing costs: [1]3000 [2]3000 [3]4500 [4]4500 [5]5000 [6]1250 Origination Points: [1]1% [2]1% [3]1% [4]1% [5]2% [6]1% 1 What is the monthly payment for each loan? 2 If held until maturity, how much interest will be paid under each scenario? 3 What is the Effective Borrowing Cost (%) for each loan if you assume it will be paid off in 5 years? 4 Now assume that you put 5% down and finance the other 15% with a 2nd mortgage. What is your new combined payment? What is your effective borrowing cost? 5 How much will your balloon payment be for in loan [5]? 6 How much of your payment is interest in the 1st month of the 5th year of option [1]? 7 What is the difference in payment between option [1] and [2]? 8 How much more interest will you pay in option [1] compared to option [2]? 9 What is the remaining balance in the 6th month of the 6th year for option [2]? 10 How would a prepayment penalty impact the interest rate on a loan? 11 Assume that you are currently looking to purchase a home, which of the scenarios is the most appealing? Explain and discuss