The beginning of this question is also located in the 7 edition of personal finace book by authur in chapter 8cc -22Q

Last week, the local newspaper mortgage rate column reported that the rate for a 30- year fixed rate mortgage was 3.88 percent, while for a 7 year balloon payment mortgage was 3.45 percent ( payments were calculated on the basis of 30 - year amortization). A 1 year ARM was available for 3.25 percent ( payments were also calculated on the basis of 30 year amortization). Assumming a loan amount of 120,000 , calculate the payment of each mortgage. Aside from the significant differences in the mortgage payment amounts, what other factors should the dumonts consider when choosing their mortgage? What are the advantages and disadvantages of an interest- only mortgage?