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anonymous
 one year ago
Madison is financing $382,300 to purchase a house. How much money will she save over the life of a 30year, fixedrate loan by buying 3 points with a rate of 5.13% instead of not buying points with a rate of 5.88%? Round to the nearest dollar.
A) $60,948
B) $63,242
C) $63,242
D) $53,302
(Not a typo)
anonymous
 one year ago
Madison is financing $382,300 to purchase a house. How much money will she save over the life of a 30year, fixedrate loan by buying 3 points with a rate of 5.13% instead of not buying points with a rate of 5.88%? Round to the nearest dollar. A) $60,948 B) $63,242 C) $63,242 D) $53,302 (Not a typo)

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jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1are you familiar with the concept of points in mortgages?

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1points reduce the interest rate

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.11 point usually reduces the interest rate by 1/4 of a percent or 1/8 of a percent

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1so if you don't buy any points up front, the interest rate is 5.88% if you do buy 3 points, then the interest rate is 5.13%

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1each point is 1% of the mortgage amount

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1each point costs you 1% of the mortgage amount

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0got it! so how do I solve this? in stupid words please :)

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.11% of $382,300 = 0.01*382,300 = 3,823

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1each point costs $3,823

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1but it looks like we're ignoring this cost for now

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1what is the monthly payment if... mortgage amount = $382,300 number of years = 30 annual interest rate = 5.88%

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0would I use the calculator from the bankrate website for mortgage?

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0ok good in that case, first payment I got 2,082.75

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1is that with the points? or without?

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0it's with the points making the rate 5.13%

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1ok how about without the points

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0Without the points making the rate 5.88% the payment is 2,262.67

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1I'm getting the same monthly payments

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0ok. now what happens?

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.11 point costs 1% of the mortgage how much does 3 points cost?

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1take 3% of the mortgage

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.13% of $382,300 = ??

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0yes and I got 11,469

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1With 3 points Total Cost = (monthly payment)*(# of months) + (cost for points) Total Cost = (2,082.75)*(360) + (11,469) Total Cost = 761,259

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1With 0 points Total Cost = (2,262.67)*(360) Total Cost = 814,561.20

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1Amount you save = (total cost with 0 points)  (total cost with 3 points)

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0and now I just subtract the two?

jim_thompson5910
 one year ago
Best ResponseYou've already chosen the best response.1I'm ignoring the down payment because it's the same for both so they subtract and cancel off

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0got it! I might have more later but for now thanks again! :)

anonymous
 one year ago
Best ResponseYou've already chosen the best response.0My Final Answer and Correct Answer!! $53,302!
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