You would like to purchase your dream home, which costs $1.5M, with a 20% down payment and a 30-year mortgage. You have the option of purchasing 1 discount point (by prepaying 1% of your loan amount) to lower your mortgage rate by 0.25% from a benchmark rate of 3.25%. This translates to a reduction in monthly mortgage payments from $5,222.48 to $5,059.25. What is the payback period of purchasing 1 discount point? O 74 months O 92 months O 7,352 months O There is not enough information to determine the answer. None of the above
You would like to purchase your dream home, which costs $1.5M, with a 20% down payment and a 30-year mortgage. You have the option of purchasing 1 discount point (by prepaying 1% of your loan amount) to lower your mortgage rate by 0.25% from a benchmark rate of 3.25%. This translates to a reduction in monthly mortgage payments from $5,222.48 to $5,059.25. What is the payback period of purchasing 1 discount point? O 74 months O 92 months O 7,352 months O There is not enough information to determine the answer. None of the above
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:You would like to purchase your dream home, which costs $1.5M, with a 20% down payment and a
30-year mortgage. You have the option of purchasing 1 discount point (by prepaying 1% of your loan
amount) to lower your mortgage rate by 0.25% from a benchmark rate of 3.25%. This translates to a
reduction in monthly mortgage payments from $5,222.48 to $5,059.25. What is the payback period of
purchasing 1 discount point?
O 74 months
O 92 months
O 7,352 months
There is not enough information to determine the answer.
None of the above
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