Aunt Tillie has agreed to loan you $10,000 for the down payment on a home. You have decided to structure the loan, so that the payment amount remains constant through the term of the contract and you can budget for a consistent loan payment each month.
With regard to the loan for a down payment on your mortgage, what drawback exists with the loan you want compared to a loan in which payments decrease through the term of the loan?
- Higher interest payments
- a longer term
- A larger down payment
- Less interest expense deduction for income tax purposes