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Bubba bought his house 20 years ago, he is borrowed $200,000 with a 30-year mortgage with...

Bubba bought his house 20 years ago, he is borrowed $200,000 with a 30-year mortgage with a 5.0% APR. His mortgage broker has offered him a 10-year mortgage with a 4% APR with 3 points closing costs. What is Charlie's old monthly payment? What is the balance on Bubba's mortgage? What is Bubba's new monthly payment? What are Bubba's present value savings after paying the points if he plans to live in the house until the mortgage is paid off?

Solutions

Expert Solution

1. Charlie's old monthly payment = $ 1,084

2. Balance on Bubba's Mortagage = $100,462

3. New monthly payment = $ 1,032

4. Bubba's present savings = $ 242

For detailed workings, kindly refer the screenshots below

jeff jeffy answered 7 months ago
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