The Smiths are buying a home that sells for $175,000. The lending institution is requiring a minimum down payment of 20%. To obtain a 20 yr mortgage at 8%, they must pay two (2) points at the time of closing.
A) What is the required down payment?
B) With 20% down payment, what is the amount of the mortage on the property?
C) What is the cost of the points?
The solution presents a detailed explanation of all the terms, shows all the calculations, and adequately answers the questions.