Linda wishes to borrow the $285,000 that she still owes on her apartment over 20 years. Linda
Question:
Linda wishes to borrow the $285,000 that she still owes on her apartment over 20 years. Linda has had the following interest rates and loan establishment fees quoted to her (repayments will be made monthly): 3.21% per annum compounded monthly, application and processing fee $450; 3.17% per annum compounded monthly, application and processing fee $750; and 2.95% per annum compounded monthly, application and processing fee $1,050. As the loan to value ratio is low at approximately 39 percent, no loan insurance will be required.
Q: Is it sufficient to either simply add up the total payments for each alternative or to see which has the lowest regular payment?
If not, on what financial basis should Linda seek to differentiate and select between the different finance options?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill