Question a borrower is purchasing property for 180000 and, Ask an Expert

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Question: A borrower is purchasing property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point. Assume the loan will be held to maturity, what is the incremental cost of borrowing the extra money? Please show steps on how to calculate.

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Category:- Basic Finance
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