Please give three examples of upfront financing costs associated with residential mortgage. Next, what rule can one apply to determine if a settlement (closing) cost should be included in the calculation of the effective borrowing cost?
A homeowner is attempting to decide between a 15 year mortgage loan at 5.5 percent and a 30 year loan at 5.9 percent. What would you advise? What would you advise if the borrower also has a large amount of credit card debt outstanding at a rate of 15 percent?