Mortgage with discount points and without discount points

Assignment Help Financial Management

Reference no: EM131942799

If a borrower is choosing between a mortgage with discount points and one without discount points, what general considerations should she take into account when making her decision? More specifically if Bank A offers this borrower Loan A, which has discount points. Bank B offers this borrower Loan B, which has no points and a lower interest rate than A (but is otherwise identical to Loan A). Are there any circumstances under which she would choose to borrower from Bank A over Bank B? This question may be answered fully in 2 sentences (or bullet points). Please limit your answer to no more than 1 paragraph.

Reference no: EM131942799

Questions Cloud

Describes fully amortizing loan : Which of the following describes a fully amortizing loan? Which of the following describes what kind of mortgage this borrower has?

What will be your annual rate of house price appreciation : You receive an offer to sell the house for $550,000. If you decide to take the offer, what will be your annual rate of house price appreciation?

Difficulty of selling mortgage in secondary market : Which of the following terms describes the risk associated with the difficulty of selling a mortgage in the secondary market?

How much interest will you pay over the lifetime of mortgage : If you hold this loan until maturity, how much interest will you pay over the lifetime of this mortgage?

Mortgage with discount points and without discount points : If a borrower is choosing between a mortgage with discount points and one without discount points,

Origination fees to get loan : You currently have a $300,000 15 year fully amortizing fixed rate mortgage with a 4.5% rate (Loan A). You had to pay $3,000 in origination fees to get Loan A.

How much will the project IRR change : how much will the project IRR change? For a increase, enter a positive value, for a decrease enter a negative value.

Derive the stock price : We have the following information for Clough, Garcia and associates. Derive the stock price of (C&G).

What would southland net income be if it only used equity : What would Southland’s net income be if it only used equity? What would Southland's return on equity be if it only used equity?

User Account

All Pages