A UCLA student saved $100,000 for the down payment on a $1,000,000 one-bedroom, two-bathroom home in Encino, California. She can qualify for either a $900,000 fully amortizing 30-year first mortgage loan at a 4.75% annual interest rate from Wells Fargo Bank, or she can qualify for a $790,000 fully amortizing 30-year first mortgage loan at a 4.25% annual interest rate with a $110,000 fully amortizing 30-year second mortgage loan at an 8.00% annual interest rate from Citibank. Should the student prefer the single $900,000 mortgage loan from Wells Fargo Bank or should she prefer the $790,000 first mortgage loan and $110,000 second mortgage loan package from Citibank? Single loan from Wells Fargo Bank No difference Depends on all the terms and conditions in the loan documents from Wells Fargo Bank as compared to those from Citibank Loan package from Citibank

A UCLA student saved $100,000 for the down payment on a $1,000,000 one-bedroom, two-bathroom home in Encino, California. She can qualify for either a $900,000 fully amortizing 30-year first mortgage loan at a 4.75% annual interest rate from Wells Fargo Bank, or she can qualify for a $790,000 fully amortizing 30-year first mortgage loan at a 4.25% annual interest rate with a $110,000 fully amortizing 30-year second mortgage loan at an 8.00% annual interest rate from Citibank. Should the student prefer the single $900,000 mortgage loan from Wells Fargo Bank or should she prefer the $790,000 first mortgage loan and $110,000 second mortgage loan package from Citibank? Single loan from Wells Fargo Bank No difference Depends on all the terms and conditions in the loan documents from Wells Fargo Bank as compared to those from Citibank Loan package from Citibank