Solution-Which plan has the lowest total up-front costs

Which plan has the lowest total up-front costs

Reference no: EM133068656

Belinda Johnson's parents and maternal grandmother have combined their finances and presented Harry and Belinda with $50,000 cash gift to use to purchase a home. The Johnsons have shopped and found a house in a new housing development that they like very much. They could either borrow from the developer or obtain a loan from one of three other mortgage lenders. The financial alternatives and data for the home are summa-rized in the table below.

(a) Which plan has the lowest total up-front costs? The highest?

(b) What would be the full monthly payment for PITI and PMI for each of the options? (c) If the Johnsons had enough additional cash to make the 20 percent down payment, would you recom-mend lender 1 or lender 2? Why?

(d) Assuming that the Johnsons will need about $3,000 for moving costs (in addition to closing costs), which financing option would you recommend? Why

Reference no: EM133068656

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Which plan has the lowest total up-front costs

Reference no: EM133068656

Reference no: EM133068656

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