There is a $180,000 loan at 9% for 20 years and a second mortgage for $40,000 at 13% for 20 years. All loans require monthly payments and are interest-only. 5 points are charged for the second mortgage. Assume the borrower will own the property for 30 years. 

Compute the effective cost (%) of the combined loans.

Answer rating: 100% (QA)

To compute the effective cost of the combined loans we need to calculate the total interest paid ove... View the full answer