1 1 . You are purchasing a new home and need to borrow $ 3 2 5...
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Question:
You are purchasing a new home and need to borrow $ from a mortgage lender. The mortgage lender quotes you a rate of APR for a year fixed rate mortgage with payments made at the end of each month The mortgage lender also tells you that if you are willing to pay point, they can offer you a lower rate of APR for a year fixed rate mortgage. One point is equal to of the loan value. So if you take the lower rate and pay the points you will need to borrow an additional $ to cover the point you are paying the lender.
Required: Assuming that you do not intend to prepay your mortgage pay off your mortgage early are you better off paying the point and borrowing at APR or just taking out the loan at without any points?
Related Book For
Financial Analysis with Microsoft Excel
ISBN: 978-1285432274
7th edition
Authors: Timothy R. Mayes, Todd M. Shank
Posted Date: