James and Amy have decided to buy a new home that costs $240,000.They want to make a 20% down payment and finance the rest over 30 years.Their bank has offered an opportunity to buy down the quoted interest rate of 3.75% by 0.125% per point purchased.Each point will cost 1% of the amount borrowed.James and Amy were hoping the interest rate was no more than 3.375%.How long will it take for the cost of the points to be recovered by the savings in the monthly mortgage payment?

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The Answer of James and Amy have decided to buy a new home that costs $240,000.They want to make a 20% down payment and finance the rest over 30 years.Their bank has offered an opportunity to buy down the quoted interest rate of 3.75% by 0.125% per point purchased.Each point will cost 1% of the amount borrowed.James and Amy were hoping the interest rate was no more than 3.375%.How long will it take for the cost of the points to be recovered by the savings in the monthly mortgage payment?

James and Amy Have Decided to Buy a New Home