Real Estate Math
A builder offers a 2-1 buydown on a $350,000 loan at a market rate of 7%. Year 1 the rate is 5%, Year 2 is 6%, then 7% thereafter. What is the approximate monthly payment saving in Year 1 vs. market rate?
AA. About $385/month
BB. About $525/month
CC. About $280/month
D$450.00000000000000000✓ Correct
Explanation
At 7%: monthly payment on $350,000 ≈ $2,329. At 5%: monthly payment ≈ $1,879.
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