Five years ago you borrowed $230,000 to finance the purchase of a $290,000 house. The interest...
Five years ago you borrowed $230,000 to finance the purchase of a $290,000 house. The interest rate on the old mortgage is 5.5%. Payment terms are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 3.5% with monthly payments for 25 years. There are no prepayment penalties associated with either loan. You feel the appropriate refinancing cost is 5% of the new loan amount.
a. What is the payment on the old loan?
b. What is the current loan balance on the old loan (five years after origination)?
c. What should be the monthly payment on the new loan?
d. Should you refinance today if the new loan is expected to be outstanding for five years?
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Five years ago you borrowed $230,000 to finance the purchase of
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please show all work!
8. *Eight years ago you borrowed $200,000 to finance the pur- chase of a $240,000 home. The interest rate on the old mort- gage loan is 6 percent. Payments are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 4 percent with monthly payments for 30 years. The new lender will charge two discount points on the loan. Other refinancing costs...
The mortgage on your house is five years old. It required
monthly payments of $ 1,422, had an original term of 30 years and
had an interest rate of 9% (APR). In the intervening five years,
interest rates have fallen and so you have decided to refinance,
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mortgage. The new mortgage has a 30-year term, requires monthly
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