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What will be your monthly payment on a $500.000 15 and a 30 yr mortgage if...

What will be your monthly payment on a $500.000 15 and a 30 yr mortgage if the rate is 2.85 % for people with good credit and 8.95% for people with bad credit 4 calculations? (The mortgage is $500,000 (not the price of the house) you will have to adjust bank rate.com default of 20% down to 0% down, 500k mortgage) Also, how much interest will you pay over the life of the 4 loans you just calculated? Why would someone finance a house with a 10-year interest only loan (site 3 reasons)?  

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Expert Solution

Reasons to finance a house with a 10-year interest only loan

i) Monthly payments are lower during the term.
ii) The borrower can purchase a larger home later by qualifying for a larger home loan.
iii) Interest expense is tax deductible hence the whole amount of the monthly payment qualifies as tax-deduction.

jeff jeffy answered 2 years ago
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