To buy your dream home you use a $4/16$ reset loan that pays interest only $($bullet loan$)$ for

the first $4$ years, followed with a reset payment to amortize over the remaining $16$ years. The

loan amount is $$280,000$ at $4\mathrm{.}75\%,$ with $2$ discount points $($to the lender$)$ and $$1450$ in third

party closing costs which the borrower must pay