Consider the following pair of loan options for a $165,000 mortgage. Calculate the monthly payment and total closing costs for each option.

Explain which is the better option and why.

Choice1: 20-year fixed rate at 3.5% with closing costs of $2800 and 1 point.

Choice2: 20-year fixed rate at 3.25% with closing costs of $2800 and 4 points.

What is the monthly payment for choice1?

$

(Do not round until the final answer. Then round to the nearest cent asneeded.)

What is the monthly payment for choice2?

$

(Do not round until the final answer. Then round to the nearest cent asneeded.)

What is the total closing cost for choice1?

$

What is the total closing cost for choice2?

$