Question

Mr. and Mrs. Chavez close on a 30 year home loan for $250,000. The monthly payment with no points is $1,580, but if they buy a point it is $1,560. What might you infer if Mr. and Mrs. Chavez choose not to buy a point?
a.
They plan to sell the house at the end of 5 years.
b.
They plan to sell the house at the end of 10 years.
c.
They plan to sell the house at the end of 15 years.
d.
They plan to stay in the house at least 30 years.

THE ANSWER IS A

Answer 1

Answer:

The Chavez family has two options when applying a house loan for 30 years which is amounting to $250,000. First, the will not take the points with a monthly payment of $1580 while if they take the points, they will have a monthly payment of $1560. What they did was they did not buy the points and the reason for this was they are planning to sell the house after 5 years.