Author Question: You are purchasing a home for $220,000 and are shopping for a loan. You have a total of $40,000 to ... (Read 64 times)

jparksx · **on:** May 5, 2020

You are purchasing a home for $220,000 and are shopping for a loan. You have a total of $40,000 to put down. In addition, there are $800 in closing costs loan and any loan fee that might be charged. Bank A offers a 10% APR amortized over 20 years with 240 equal monthly payments. There is no loan fee. Bank B offers an 8.5% APR amortized over 20 years with 240 equal monthly payments. There is a 4% loan fee (i.e., a one-time up-front charge of 4% of the loan). Calculate the monthly mortgage payment of both loans and identify which is the better loan.
◦ Bank A: $2123; Bank B: $1909; Bank B offers a better loan
◦ Bank A: $1745; Bank B: $1569; Bank B offers a better loan
◦ Bank A: $1737; Bank B: $1562; Bank A offers a better loan
◦ Bank A: $1737; Bank B: $1562; Bank B offers a better loan
◦ Bank A: $1745; Bank B: $1569; Bank A offers a better loan

dlook33 · **Reply #1 on:** May 5, 2020

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