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You have decided to buy a 2,000 square-feet house in Denton, close to a good public school. The average price in the area is $190
You have decided to buy a 2,000 square-feet house in Denton, close to a good public school. The average price in the area is $190 per square feet. The bank will finance 80% of the house value, so you need savings for the 20% down payment. You sign a 30-year 3/1 adjustable rate mortgage (ARM), which carries a 6.2% fixed rate for the first 3 years, and then (after 3 years) is adjusted to the 1-year LIBOR + 1.25 %. Compute your monthly payments in 3 years (month 37) if the LIBOR is 7%
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$2,095
$2,256
$3,003
$2,880
$2,051
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