Business, 25.02.2021 06:20 symonya

Demarco and Tanya have received information about three separate mortgage offers. In two or three paragraphs, describe your recommendation for the best financial choice in their situation. Evaluate each of the three offers, compare and contrast their effectiveness, and explain the offer that works best. As you explain your answer, support it using reasons and evidence from the calculations you made based on the information provided in this guide for Analyzing Mortgage Options. Appendix A Mortgage Option 1
Demarco and Tanya visited McDonald and Shea Mortgage Financials where they applied for a fixed-rate mortgage.
The fixed-rate offer included the following components:
▪Purchaseprice: $170,000(before down payment)
▪Term: 30 years
▪Interest rate: 4.25%
The mortgage consultant reminded them that this offered a fixed payment each month for the full term of their loan.

Appendix B: Mortgage Option 2
Next, the mortgage consultant explained that they had been approved for an adjustable-rate mortgage.
The adjustable-rate offer included the following components:3
▪Purchase price:$170,000(before down payment)
▪Term: 30 years
▪Adjusted annually
▪Initial interest rate: 3.5%
The mortgage consultant explained that due to current changes in the economy, their rates would likely increase over time, rather than stay constant (or drop).

Appendix C: Mortgage Option 3
Finally, the mortgage consultant explained that they had been approved for a balloon payment option.
The balloon payment offer included the following components:
▪Purchase price:$170,000(before down payment)
▪Term: 8 years
▪Interest rate: 4.0%
▪Remaining balance: Due immediately after 8 years
The mortgage consultant reminded them that their payments would stay fixed for the first eight years, after whichthe remainder of the loan would be due immediately. It would be a large sum.

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