A young physician makes $180,000 per year with an annual salary increase of 2%. He is interested in buying a house. He has $85,000 in his savings account. The appraisal value for the house is $400,000.
After exhaustive shopping for a mortgage, a bank offered him these options:
1. A mortgae for 30 years, 5.5% fixed, 0 points, with 20% downpayment or
2. a mortgae for 20 years, 5.5% fixed, 0 pots with 20% downpayment.
Which plan best fits for the person's budget.