Question: You are considering two possible fixed-rate level payment loans, Loan A and Loan B. Loan A has the following information: loan amount is $300,000, 6.6%

You are considering two possible fixed-rate level payment loans, Loan A and Loan B. Loan A has the following information: loan amount is $300,000, 6.6% contract rate, 30 year maturity with monthly payments, it has a 1.5% upfront fee and a mortgage insurance fee of 1%. Loan B has the following information: loan amount is $300,000, 6.35% contract rate, 30 year maturity with monthly payments, it has a 4% upfront fee and a mortgage insurance fee of 1%. Calculate the mortgage payment for each loan (3 points). Calculate the APR of each loan given the points taken (4 points). Which loan do you prefer? why?

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