4. You plan to purchase a house for $700,000 using a 30-year mortgage obtained from your local...

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4. You plan to purchase a house for $700,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price, in this case, equal to $140000. Thus, the mortgage loan amount will be $560000.

Your bank offers you the following two options for payment:

-Option 1: Mortgage rate of 3.6 percent per year and zero points.

- Option 2: Mortgage rate of 3 percent per year and 1 point

-Which option you should choose? why?

Related Book For answer-question

Financial Markets and Institutions

ISBN: 978-0077861667

6th edition

Authors: Anthony Saunders, Marcia Cornett

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Posted Date: Oct 26, 2023 02:57 AM

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4. You plan to purchase a house for $700,000 using a 30-year mortgage obtained from your local...

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Option 2 Mortgage rate of 3 percent per year and 1 point is the better option A mortgage point is a ... View the full answer

Financial Markets and Institutions

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