Final answer:
To calculate Melissa's monthly mortgage payment, we need to subtract the down payment and points from the purchase price, then use the loan amount, interest rate, and loan term to calculate the monthly payment. After performing the calculations, Melissa's monthly mortgage payment will be approximately $650.46.
Step-by-step explanation:
To calculate the monthly mortgage payment, we need to calculate the loan amount after the down payment and points. First, we calculate the down payment and subtract it from the purchase price: $160,000 x 20% = $32,000. The loan amount is then $160,000 - $32,000 = $128,000. Next, we calculate the points which are 3% of the loan amount: $128,000 x 3% = $3,840. The loan amount with points is $128,000 + $3,840 = $131,840.
Now we can calculate the monthly mortgage payment using the loan amount, interest rate, and loan term. We can use the formula:
Monthly payment = (Loan amount x Monthly interest rate) / (1 - (1 + Monthly interest rate)^(-Loan term in months))
For a 30-year mortgage at 4.9% interest rate, the monthly interest rate is 4.9% / 12 = 0.407%. Plugging in the values, we get:
Monthly payment = ($131,840 x 0.407%) / (1 - (1 + 0.407%)^(-30 x 12)) = $650.4601.
Therefore, Melissa's monthly mortgage payment will be approximately $650.46, so the correct answer is B. $650.46.