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You plan to purchase a house for $115000 using a 30 year mortgage obtained from your local bank You will make a down payment of 20 percent of the purchase price and monthly payments You will not

You plan to purchase a house for $115,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthly payments. You will not pay off the mortgage early.

a. Your bank offers you the following two options for payment:

Option 1: Mortgage rate of 9 percent and zero points.

Option 2: Mortgage rate of 8.85 percent and 2 points.

Which option should you choose?

b. Your bank offers you the following two options for payment:

Option 1: Mortgage rate of 10.25 percent and 1 point.

Option 2: Mortgage rate of 10 percent and 2.5 points.

Which option should you choose?

You plan to purchase a house for $115,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthly payments. You will not pa

 

Apr 29 2020 View more View Less

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