Mr. Lopez bought a house in Laredo for $250,000 in January 1990. The first payment is due February 1, 1991. He got a mortgage rate of 5 percent. The mortgage was for 30 years. He made a down payment of 15 percent. The PMI interest is 0.75 percent.
1. What was his payment in February 1991? Make sure you add the PMI. (Hint: First calculate the mortgage payment, then add the PMI, PMI=(interest on PMI*loan outstanding)/12)
2. Had he got a mortgage for 15 years, the interest rate would have been 3.5 percent. If that's what he did, what would have been the payment for February 1991? (Hint: First calculate the mortgage payment, then add the PMI, PMI=(interest on PMI*loan outstanding)/12)