ABSTRACT
When it comes to borrowing money, most people think they have made a great deal if they get a low rate. Sometimes they can be very wrong. Here is an example.
You have just bought a new home and you are returning from the closing. You run into a new neighbor who has just bought the house next door, which is relatively comparable to yours. You strike up a conversation about your respective experiences in getting a mortgage. Your new neighbor is pretty happy with himself. He tells you he just got a great deal on his mortgage loan: the bank gave it to him for an interest rate of 8%.
