The williams are buying a house that costs $323,000 and can afford a 10% down payment. if the williams want the lowest monthly payment, which loan option would you recommend? a. 15 year fixed, 5% down at a fixed rate of 5.5% b. 30 year fha, 3.5% down at a fixed rate of 6.25% c. 30 year fixed, 20% down at a fixed rate of 5.75% d. 30 year fixed, 10% down at a fixed rate of 6%

Answer : d. 30 year fixed, 10% down at a fixed rate of 6%

The Williams are buying a house that costs $323,000 and can afford a 10% down payment.

Option C has 20% down payment that is not affordable so we ignore it.

We use loan payment formula to find monthly payment

Where A is the loan amount

P is the monthly amount of loan

n is the number of months in a year

'i' is the rate of interest / 12( for months

(a.) 15 year fixed, 5% down at a fixed rate of 5.5%

5% down payment = $323,000 * 0.05= 16150

loan amount = 323000 - 16150= 306850

(b.) 30 year , 3.5% down at a fixed rate of 6.25%

3.5% down payment = $323,000 * 0.035= 11305

loan amount = 323000 - 11305= 311695

(d)30 year fixed, 10% down at a fixed rate of 6%

10% down payment = $323,000 * 0.1= 32300

loan amount = 323000 - 32300= 290700

From the given options, option d has the lowest monthly payment.

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