To get the best available interest rate and loan terms to buy a two-bedroom, two-bathroom home in Redondo Beach, California at a purchase price of $1,800,000, a young couple was told that if they were able to make a 20% down payment and took out a 30-year fully amortizing fixed rate conforming mortgage loan for the balance of the purchase price, they could get a loan with an annual interest rate of 6.5% on the contract loan amount, with one point charged by the lender plus a $1,500 appraisal fee and a $50 credit report fee. If the lender agreed to “net fund” the loan and deduct the points and fees from the contract loan amount at the closing so that the couple would not have to pay those fees and costs out of pocket, what portion of their first month’s payment would be principal? a.$1,301.78 b.$1,287.36 c.$7,713.60 d.$7,800.00

To get the best available interest rate and loan terms to buy a two-bedroom, two-bathroom home in Redondo Beach, California at a purchase price of $1,800,000, a young couple was told that if they were able to make a 20% down payment and took out a 30-year fully amortizing fixed rate conforming mortgage loan for the balance of the purchase price, they could get a loan with an annual interest rate of 6.5% on the contract loan amount, with one point charged by the lender plus a $1,500 appraisal fee and a $50 credit report fee. If the lender agreed to “net fund” the loan and deduct the points and fees from the contract loan amount at the closing so that the couple would not have to pay those fees and costs out of pocket, what portion of their first month’s payment would be principal? a.$1,301.78 b.$1,287.36 c.$7,713.60 d.$7,800.00

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