A person was considering buying a house priced at $300000. A mortgage company claimed the interest rate for the 20 year loan is 3.75%. The company also
estimated that the points and Appraisal Credit Report Processing Document Preparation Administration Underwriting Flood Certificate Tax Service Wire
Transfer and other fees would be $10000 in total.
A. What would the monthly payment if the person decided to borrow 90% of the cost of the house and 100% of the processing fees?
B. What is the APR of the loan?
C. If the person accepts the terms of the loan on Feb. 28 2010 the first monthly payment is due on March 31. How much mortgage would be paid off after the
payment on May 31 2011?
D. How much interest charge could this person claim for deduction in the 2011 Tax Return i.e. the total interst occur during year 2010?