Mortgage rate-bank offers two options for payment

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Reference no: EM131067436

You plan to purchase a house for $115,000 using a 30 year mortgage pbtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early.

A) Your bank offers you the following two options for payment:

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 for payment:

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?

Reference no: EM131067436

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