You need a loan of $160,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices.

Choice 1: -30 year fixed rate at 5% with closing costs of $2,300 and no points.

Choice 2: -30 year fixed rate at 4.5% with closing costs of $2,300 and3 points.

What is the monthly payment for choice 1?

$____________

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

What is the monthly payment for choice 2?

$___________

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

What is the total closing cost for choice 1?

$______________

What is the total closing cost for choice 2?

$______________

Why might choice 1 be the better choice?

A.The monthly payment is higher.

B.The monthly payment is lower.

C.The closing costs are higher.

D.The closing costs are lower.

Why might choice 2 be the better choice?

A.The closing costs are lower.

B.The monthly payment is higher.

C.The monthly payment is lower.

D.The closing costs are higher.