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You are buying a house and will borrow $225,000 on a 30-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.55 percent. Alternatively, she tells you that you can “buy down” the interest rate to 4.35 percent if you pay points upfront on the loan. A point on a loan is 1 percent (one percentage point) of the loan value. What are the most points you would be willing to pay to buy down the interest rate?

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Financial Management, Finance

Category:- Financial Management
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