What is the loans annual amount percentage rate

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Reference no: EM13727260

A couple planning to buy a home have found a $300,000 home available with the following mortgage loan options. (option a) the borrowers can obtain an 80 percent loan to value at a 3.5% interest rate with monthly payments amortized over 30 years and closing cost 3% of the new loan. Alternatively, (option b) the couple could obtain a 90 percent loan at 4.75% rate for 30 years and higher closing costs of 4.75% of the new loan. the borrower plans to stay in the home for the entire loan term. Option A.

a) For option A, what is the down payment? $_________

b) Closing Costs? $___________

c) Mortgage payment per month? $________.

Option B.

d) For option B, what is the down payment? $________

e) Closing costs? $_________

f) Mortgage payment per month? $________.

APR Calculations

g) If the closing cots are 3% on option A, the 80% loan; what is the loan's annual amount percentage rate? ______________

h) If the closing costs are 4.5% on option B, the 90% loan; what is the loan's annual percentage rate? ____________,

Reference no: EM13727260

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