Keeping the time value of money in mind if an investor

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From these five lenders find the following mortgage rates: 10years (if available), 15 years (if available) and 30 years.

  • Convert these rates into Effective Annual Rate (EAR's).
  • Discuss which rate is actually the lowest rate and the highest rate. Why is this the case?
  • Present the rates in a table listing the lender, the rate, time period and any provisions.
  • Why do the different lenders have different rates?
  • What are three common mistakes most homebuyers make when looking at quoted mortgage rates?
  • Keeping the time value of money in mind if an investor choose the 30 year mortgage, what does that say about their opinion of the time value money?

Is the difference in rates going to have a material impact on the cost to the home buyer? Explain your answer.

Reference no: EM13396467

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