Question

Eli is buying a townhouse that costs $276,650. He has $28,000 in savings and earns $4,475 a month. Eli would like to spend no more than 30% of his income on his mortgage payment. Which loan option would you recommend to Eli? a. 30 year FHA, 3.5% down at a fixed rate of 6.5% b. 30 year fixed, 5% down at a fixed rate of 6.25% c. 30 year fixed, 6.5% down at a fixed rate of 5.75% d. 30 year fixed, 10% down at a fixed rate of 5%

Answer 1

Answer: D

Explanation:

Answer 2

The answer is: a. 30 year FHA, 3.5% down at a fixed rate of 6.5%.

Explanation:

If Eli wants to pay as little as possible, and we start with a 30-year mortgage, among the percentages that must be paid, the lowest is 3.5%, in terms of the fixed rate, the lowest is 5%, but if we see the amount of 30 years, it is 10%, so although the fixed rate of 6.5% is higher than that of 5%, the payment is only made once, and the difference is not so much compared to 10% for 30 years.

The answer is: a. 30 year FHA, 3.5% down at a fixed rate of 6.5%.