Problem:
The Smiths are buying a home that sells for $175,000. The lending institution is requiring a minimum down payment of 20%. To obtain a 20 yr mortgage at 8%, they must pay two (2) points at the time of closing.
Q1. What is the required down payment?
Q2. With 20% down payment, what is the amount of the mortage on the property?
Q3. What is the cost of the points?