You need a loan of $110,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. =
Choice 1: 15-year fixed rate at 4% with closing costs of$1600 and no points.
Choice 2: 15-year fixed rate at 3.5% with closing costs of$1600 and 3 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 lower.
B. The closing costs are lower.
C. The monthly payment is higher.
D. The closing costs are higher.
Why might choice 2 be the better choice?
A. The closing costs are lower.
B. The monthly payment is lower
C. The monthly payment is higher.
D. The closing costs are higher.