How to Compare Mortgage Offers WISELY |  Contemporary Mathematics
Channel: MathHub TV
Date: 2021-04-05

In this lesson, I am going to teach you how to compare mortgage offers wisely.  This is one of the lessons in Contemporary Mathematics.  

We will be looking at these two problems:

1.  The price of a home is $160,000.  The bank requires a 15% down payment.  The buyer is offered two mortgage options: 15-year fixed at 8% or 30-year fixed at 8%.  Calculate the amount of interest paid for each option.  How much does the buyer save in interest with the 15-year option?

2.  Which mortgage loan has the greater total cost (closing costs + the amount paid for points + total cost of interest)? 

A $120,000 mortgage with two loan options:
Mortgage A: 30-year fixed at 7% with closing costs of $2000 and one point
Mortgage B:  30-year fixed at 6.5% with closing costs of 1500 and four points

⏲️ Timestamps ⏲️
Introduction (0:00)
Example 1 (0:03)
Example 2 (6:54)

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