You are interested in buying a new home that costs $280,000. The mortgage company requires a down payment of 15% of the cost of the home. You will borrow the rest. The mortgage company offers you 2 options. Option 1 is a 15 year loan with an APR of 6.75% and option 2 is a 30 year loan with an APR of 5.55%.

Question

You are interested in buying a new home that costs $280,000.  The mortgage company requires a down payment of 15% of the cost of the home.  You will borrow the rest.  The mortgage company offers you 2 options.  Option 1 is a 15 year loan with an APR of 6.75% and option 2 is a 30 year loan with an APR of 5.55%.

anonymous · Answer

a. For each option, find the monthly mortgage payment, the total amount paid back and the total amount of interest paid.  Write these in your Word document. 

b.  Which option would you choose and why?

anonymous · Answer

r u there hero