What is the apr for option

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Reference no: EM131953225

A homebuyer intends to purchase a $300,000 home. The two financing options available to the buyer are:

1) He can obtain 80% loan at a 4.25% interest rate with monthly payments amortizedover 30 years and total closing costs of 2.5% of the new loan.

What is the APR for option 1?

2) He can obtain 95% FHA loan at a rate of 6.75% with monthly payments amortized over 30 years and total closing costs of 5.5% of the new loan.

What is the APR for option 2?

Reference no: EM131953225

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