Question

The Johnsons are buying a house that costs $210,000 and can afford a 20% down payment. If the Johnsons want the lowest monthly payment, which loan option would you recommend?
a.
30 year FHA, 3.5% down at a fixed rate of 6.25%
b.
30 year fixed, 20% down at a fixed rate of 6%
c.
30 year fixed, 10% down at a fixed rate of 6%
d.
15 year fixed, 20% down at a fixed rate 5.5%


Please select the best answer from the choices provided

A
B
C
D

Answer 1

B

Calculations (rounded):
- a: loan = 210,000 − 3.5% = $202,650; 30 yr @6.25% → monthly ≈ $1,248
- b: loan = 210,000 − 20% = $168,000; 30 yr @6.00% → monthly ≈ $1,007 ← lowest
- c: loan = $189,000; 30 yr @6.00% → monthly ≈ $1,133
- d: loan = $168,000; 15 yr @5.50% → monthly ≈ $1,373

So option B is best for the lowest monthly payment.