Question
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)
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