Two banks offer 30-year $150,000 mortgages at 8.5% and charge $1,000 loan application fee. Bank X refunds the fee if the application is denied, bank Y does not. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating APR, but this is not required with nonrefundable fees (presumably because refundable fees are part of the loan rather than a fee). How do I calculate EARs and APRs on these two loans.
I have been breaking my brain on this one for a long time now and I know the solutions but not how to get that solution I need a workout. So can somebody please help me out here. Thanks a million for the attention.
