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Suppose you are two years into a 30-year mortgage at 4.125%. Your minimal monthly payment is $710...

Suppose you are two years into a 30-year mortgage at 4.125%. Your minimal monthly payment is $710.79 and your remaining balance on the loan is $141,500. You've been offered a deal to refinance to a 15 year mortgage at 3.125% with no closing costs. To determine if you should refinance, answer the following.

(A) What is the monthly payment on a 15 year mortgage for $141,500 at 3.125% interest?

(B) If you were to make the minimum monthly payments on the 15 year loan, how much would you pay in interest?

(C) Suppose, instead that you were to just take the monthly payments for the 15 year loan (i.e., your answer to (a)) and apply them to your current loan at 4.125% instead. How soon would you pay off the loan? How much would you pay in interest?

(D) Should you just pay ahead on your current loan or should you refinance to the 15 year loan? Why or why not?

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酉, E よづRS ! payne alamle

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