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You just took a fixed-rate mortgage for $150,000 at 4.75% for 30 years, monthly payments, two discount points. Before you make any payments you receive a nice raise so you plan to pay an extra $160 per month on top of your normal payment.
A. What is your net interest savings over the life of the loan, assuming the loan is held to its maturity?
B. If you make this higher payment and hold the loan for its full life, what is the effective cost of the loan?
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At one time many customers turned to Sears for home improvement projects. As the economy boomed many warehouse stores began to open their doors.
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