Question

In: Finance

The mortgage on your house is five years old. It required monthly payments of $1,402​, had...

The mortgage on your house is five years old. It required monthly payments of $1,402​, had an original term of 30​ years, and had an interest rate of 8% ​(APR). In the intervening five​ years, interest rates have fallen and so you have decided to

refinance—that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 5.625% (APR).

a. What monthly repayments will be required with the new​ loan?

b. If you still want to pay off the mortgage in 25​ years, what monthly payment should you make after you​ refinance?

c. Suppose you are willing to continue making monthly payments of $1,402.How long will it take you to pay off the mortgage after​ refinancing?

d. Suppose you are willing to continue making monthly payments of $1,402​,and want to pay off the mortgage in 25 years. How much additional cash can you borrow today as part of the​ refinancing?

Solutions

Expert Solution


Related Solutions

The mortgage on your house is five years old. It required monthly payments of $1,402​, had...
The mortgage on your house is five years old. It required monthly payments of $1,402​, 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 refinancelong dash—that ​is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 6.125% ​(APR). a. What monthly...
The mortgage on your house is five years old. It required monthly payments of $1,422, had...
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 10% (APR). In the intervening five years, interest rates have fallen and so you have decided to refinance - that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-years term, requires monthly payments, and has an interest rate of 5.625% APR. a.) What...
The mortgage on your house is five years old. It required monthly payments of $1,308, had...
The mortgage on your house is five years old. It required monthly payments of $1,308, had an original term of 30 years, and had an interest rate of 10% APR (compounded monthly). In the intervening five years, interest rates have fallen and so you have decided to refinance—that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-year term, requires monthly payments, and has an interest rate of 6.375 (a) What monthly...
The mortgage on your house is five years old. It required monthly payments of $1,390​, had...
The mortgage on your house is five years old. It required monthly payments of $1,390​, 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 long dash—that ​is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 6.125% (APR). a. What...
The mortgage on your house is five years old. It required monthly payments of $1,450​, had...
The mortgage on your house is five years old. It required monthly payments of $1,450​, had an original term of 30​ years, and had an interest rate of 8 %​(APR). In the intervening five​ years, interest rates have fallen and so you have decided to refinance—that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 5.625% ​(APR). a. What monthly repayments...
The mortgage on your house is five years old. It required monthly payments of $1,450​, had...
The mortgage on your house is five years old. It required monthly payments of $1,450​, had an original term of 30​ years, and had an interest rate of 8% ​(APR). In the intervening five​ years, interest rates have fallen and so you have decided to refinance—that ​is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 6.125% ​(APR). a. What monthly repayments...
The mortgage on your house is five years old. It required monthly payments of $1,390​, had...
The mortgage on your house is five years old. It required monthly payments of $1,390​, had an original term of 30​ years, and had an interest rate of 8% ​(APR). In the intervening five​ years, interest rates have fallen and so you have decided to refinancelong dash—that ​is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a​ 30-year term, requires monthly​ payments, and has an interest rate of 6.625% ​(APR). a. What monthly...
The mortgage on your house in Winnipeg is five years old. It required monthly payments of...
The mortgage on your house in Winnipeg is five years old. It required monthly payments of $1402, had an original term of 30 years, and had an interest rate of 9% (APR with semiannual compounding). In the intervening five years, interest rates have fallen, housing prices in the United States have fallen, and you have decided to retire to Florida. You have decided to sell your house in Winnipeg and use your equity for the down payment on a condo...
The mortgage on your house in Winnipeg is five years old. It required monthly payments of...
The mortgage on your house in Winnipeg is five years old. It required monthly payments of $1402, had an original term of 30 years, and had an interest rate of 9% (APR with semiannual compounding). In the intervening five years, interest rates have fallen, housing prices in the United States have fallen, and you have decided to retire to Florida. You have decided to sell your house in Winnipeg and use your equity for the down payment on a condo...
The mortgage on your house is five years old. It required monthly payments of SEK 12,000,...
The mortgage on your house is five years old. It required monthly payments of SEK 12,000, had an original term of 30 years, and had an interest rate of 5% (APR). In the intervening five years, interest rates have fallen and so you have decided to refinance - that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-year term, requires monthly payments, and has an interest rate of 2% (APR). 1....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT