You need a loan of $125,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices.

 

Choice 1: 30-year fixed rate at 6% with closing costs of $1100 and no points.

Choice 2: 30-year fixed rate at 5.5% with closing costs of $1100 and 2 points.