Final answer:
To calculate the borrower's effective cost for a 30 year monthly pay mortgage with a 7.5% interest rate and 7 points down, you need to calculate the loan amount and the monthly payment.
Step-by-step explanation:
The borrower's effective cost for a 30 year monthly pay mortgage with a 7.5% interest rate and 7 points down can be calculated as follows:
1. Calculate the loan amount after the down payment: Loan amount = Total cost of the house - Down payment
2. Calculate the monthly payment using the loan amount, interest rate, and the number of months:
Monthly payment = (Loan amount * Monthly interest rate) / (1 - (1 + Monthly interest rate)^(-Total number of months))