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Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322Real Estate Principles 3rd Edition by David Ling,Wayne Archer
Edition 3ISBN: 978-0073377322 Exercise 20
Which of the following statements is true about 15- and 30-year fixed-payment mortgages
A) Thirty-year mortgages are more popular than 15-year mortgages among homeowners who are refinancing.
B) Borrowers pay more total interest over the life of a 15-year mortgage than on a 30-year loan.
C) The remaining balance on a 30-year loan declines more quickly than an otherwise comparable 15-year mortgage.
D) Assuming they can afford the payments on both mortgages, borrowers usually should choose a 30-year mortgage over an otherwise identical 15-year loan if their discount rate (opportunity cost) exceeds the mortgage rate.
A) Thirty-year mortgages are more popular than 15-year mortgages among homeowners who are refinancing.
B) Borrowers pay more total interest over the life of a 15-year mortgage than on a 30-year loan.
C) The remaining balance on a 30-year loan declines more quickly than an otherwise comparable 15-year mortgage.
D) Assuming they can afford the payments on both mortgages, borrowers usually should choose a 30-year mortgage over an otherwise identical 15-year loan if their discount rate (opportunity cost) exceeds the mortgage rate.
Explanation
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D. Assuming they can afford the payments...
Real Estate Principles 3rd Edition by David Ling,Wayne Archer
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