You need a loan of $135,000 to buy a home. Calculate your monthly payment and total closing costs for each choice below. Briefly discuss how you would decide between the two loans. Choice 1: 15 year fixed rate at 4% with closing costs of $2700 and no points. Choice 2: 15 year fixed rate at 3.5% with closing costs of $2700 and 5 points. What’s the monthly payment for choices 1 and 2? What are the total closing costs for choices 1 and 2?
