You plan to purchase a house for $115,000 using a 30 yearmortgage pbtained from your local bank. You will make a downpayment of 20 percent of the purchase price. You will not pay offthe mortgage early.
A) Your bank offers you the following two options forpayment:
Option 1: Mortgage rate of 9% and 0 points
Option 2: Mortgage rate of 8.85% and 2 points.
Which option should you choose
B) Your bank offers you the following two options forpayment:
Option 1: Mortgage rate of 10.25% and 1 point
Option 2: Mortgage rate of 10% and 2.5 points.
Which option should you choose?
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