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(Solved): A purchaser of a $250,000 house is comparing two fixed rate, 30-year loan alternatives. Option 1:&n ...



A purchaser of a $250,000 house is comparing two fixed rate, 30-year loan alternatives.

Option 1:  80% LTV at 8% - monthly payments of $1,468

Option 2:  65% LTV at 7% - monthly payments of $1,081

What is the incremental cost of borrowing the extra proceeds under Option 1?



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LTV: "Loan to value" is the percentage of th
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