Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are buying a house and will borrow $230,000on a 25 year fixed rate mortgage with monthly payments to finance the purchase . Your loan

You are buying a house and will borrow $230,000on a 25 year fixed rate mortgage with monthly payments to finance the purchase . Your loan officer has offered you a mortgage with APR of 4.60% alternatively SHE TELLS YOU THAT you can "buy down" the interest rate to 4.25% if you pay points up front on the loan . A point on the loan is 1% of the loan value. You believe that you will only live in the house for 7 years before selling the house and buying another house. This means seven years , you will pay off the remaining balance of your original mortgage . What is the max number of points that you would be willing to pay now ? ( Do not round up intermediate calculations. Round your answer to 2 decimal places. eg 32.16)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Algebra 2 Grades 9-12 McDougal Littell High School Math Texas

Authors: MCDOUGAL LITTEL

Texas

9780618595556, 0618595554

More Books

Students also viewed these Mathematics questions

Question

Find the derivative of the function. F(t) = etsin(2t) F'(t) =

Answered: 1 week ago

Question

Explain the different types of marketing strategies.

Answered: 1 week ago

Question

Explain product positioning.

Answered: 1 week ago

Question

Explain Industrial market segment.

Answered: 1 week ago