Now suppose the mortgage also requires a loan origination fee of 1 point. This means that to take out the loan, you also have to pay a fee of 1% of the amount borrowed. So now suppose you borrow $101,010.10. The loan origination fee will be $1,010.10, so you will the 100,000 you need to buy the house. Again, the mortgage requires monthly payments for 30 years, and the loan rate is 3% annual rate, compounded monthly.
a. Calculate your monthly payments for this loan.
b. Suppose after just one month, you need to move and will sell your home. How much will you owe?
c. What rate of interest did you actually pay to borrow the $100,000 for one month?