ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The total cost of the home will stay the same
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The total cost of the home will decrease
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The total cost of the home will increase
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None of the above
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Detailed explanation-1: -Historically low interest rates and monthly payments are a few of the reasons that 30-year fixed mortgages are the most popular way to buy a home.
Detailed explanation-2: -Unlike fixed rate mortgages that have an interest rate that remains the same for the life of the loan, the interest rate on an ARM will change periodically.
Detailed explanation-3: -One of the most popular loan options is a 30-year fixed-rate mortgage loan. This means that you’ll pay back the loan over 30 years, and your interest rate will remain the same throughout the life of your loan.
Detailed explanation-4: -These factors include the total amount you’re borrowing from a bank, the interest rate for the loan, and the amount of time you have to pay back your mortgage in full. For your mortgage calc, you’ll use the following equation: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1].