Question

1. use the arrows to move each item into the correct order. click the \up\ arrow to move the item up, or click the \down\ arrow to move the item down. once all items are in the correct order, submit your response.

brett is looking at four different mortgage options so that he can purchase a house. he will decide on which option to take based on paying the least amount of money for the loan origination fee. calculate and then order the amount of the loan origination fees from smallest to largest.

image of a house

a $250,000 mortgage with a loan origination fee of 2.1 points.
a $238,000 mortgage with a loan origination fee of 2.2 points.
a $265,000 mortgage with a loan origination fee of 2.0 points.
a $229,000 mortgage with a loan origination fee of 2.4 points

Explanation:

Step1: Recall that 1 point = 1% of the mortgage amount. So, to find the loan origination fee, we calculate (points / 100) * mortgage amount.

For Option A: $\$250,000$ mortgage, 2.1 points.

Fee = $\frac{2.1}{100} \times 250000 = 2.1 \times 2500 = \$5250$

For Option B: $\$238,000$ mortgage, 2.2 points.

Fee = $\frac{2.2}{100} \times 238000 = 2.2 \times 2380 = \$5236$

For Option C: $\$265,000$ mortgage, 2.0 points.

Fee = $\frac{2.0}{100} \times 265000 = 2.0 \times 2650 = \$5300$

For Option D: $\$229,000$ mortgage, 2.4 points.

Fee = $\frac{2.4}{100} \times 229000 = 2.4 \times 2290 = \$5496$

Step2: Now, we compare the fees: $\$5236$ (Option B), $\$5250$ (Option A), $\$5300$ (Option C), $\$5496$ (Option D).

So, the order from smallest to largest is: B, A, C, D.

Answer:

1. A $238,000 mortgage with a loan origination fee of 2.2 points.
2. A $250,000 mortgage with a loan origination fee of 2.1 points.
3. A $265,000 mortgage with a loan origination fee of 2.0 points.
4. A $229,000 mortgage with a loan origination fee of 2.4 points