Question
In: Finance
The Sandersons are planning to refinance their home. The outstanding principal on their original loan is...
The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $100,000 and was to amortized in 240 equal monthly installments at an interest rate of 11%/year compounded monthly. The new loan they expect to secure is to be amortized over the same period at an interest rate of 8%/year compounded monthly. How much less can they expect to pay over the life of the loan in interest payments by refinancing the loan at this time? (Round your answer to the nearest cent.)
Solutions
Expert Solution
It is given to calculate the difference between interest outgo in both the scenarios i.e. before refinancing and after refinancing.
Formula in the above table are worked out as under -
I hope above answer will help you in your task.
jeff jeffy answered 4 weeks agoRelated Solutions
The Sandersons are planning to refinance their home. The outstanding principal on their original loan is...
The Sandersons are planning to refinance their home. The
outstanding principal on their original loan is $120,000 and was to
amortized in 240 equal monthly installments at an interest rate of
10%/year compounded monthly. The new loan they expect to secure is
to be amortized over the same period at an interest rate of 7%/year
compounded monthly. How much less can they expect to pay over the
life of the loan in interest payments by refinancing the loan at
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The Martinezes are planning to refinance their home (assuming that there are no additional finance charges)....
The Martinezes are planning to refinance their home (assuming
that there are no additional finance charges). The outstanding
balance on their original loan is $125,000. Their finance company
has offered them two options:
Option A: A fixed-rate mortgage at an interest rate of
6.5% per year compounded monthly, payable over a 25-year period in
300 equal monthly installments.
Option B: A fixed-rate mortgage at an interest rate of
6.25% per year compounded monthly, payable over a 15-year period in
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The Martinezes are planning to refinance their home (assuming that there are no additional finance charges)....
The Martinezes are planning to refinance their home (assuming
that there are no additional finance charges). The outstanding
balance on their original loan is $200,000. Their finance company
has offered them two options:
Option A: A fixed-rate mortgage at an interest rate of
6.5% per year compounded monthly, payable over a 30-year period in
360 equal monthly installments.
Option B: A fixed-rate mortgage at an interest rate of
6.25% per year compounded monthly, payable over a 12-year period in
144...
The Martinezes are planning to refinance their home (assuming that there are no additional finance charges)....
The Martinezes are planning to refinance their home (assuming
that there are no additional finance charges). The outstanding
balance on their original loan is $150,000. Their finance company
has offered them two options: Option A: A fixed-rate mortgage at an
interest rate of 6.5% per year compounded monthly, payable over a
30-year period in 360 equal monthly installments. Option B: A
fixed-rate mortgage at an interest rate of 6.25% per year
compounded monthly, payable over a 15-year period in 180...
Refinance decision: The original loan is for $150,000 with terms 6%, 30 years payable monthly. The...
Refinance decision: The original loan is for $150,000 with terms
6%, 30 years payable monthly. The elapsed time on the original loan
is 5 years. The new loan rate is 3.6% which will be held 7 years.
The cost of refinancing is $3,000. The opportunity cost is
9%.
A. Prepare a table that calculates the change in monthly payment
and change in Loan Balance numbers:
B. Do the Present Value Analysis:
What are some lenders that do home loan refinance with someone of low income, state of...
What are some lenders that do home loan refinance with someone
of low income,
state of florida
When in the duration of the loan is it optimal to do cash-out refinance? What about...
When in the duration of the loan is it optimal to do cash-out
refinance? What about non-cashout refinance?
The example loan conditions are (enter these values under Loan Terms): Loan amount borrowed (principal or...
The example loan conditions are (enter these values under Loan
Terms): Loan amount borrowed (principal or pv) $100,000
Loan interest (rate) is 7.5%
Loan term (number of payments or nper) is 9 years
Annual payments of principal and interest
Calculate the annual loan payment in cell C7 using the PMT
function in Excel. The PMT function is in the formulas under the
Financial menu option. In the PMT Menu box, the
Rate is the interest rate, Nper
is the number...
You have decided to refinance your mortgage. You plan to borrowwhatever is outstanding on your...
You have decided to refinance your mortgage. You plan to borrow
whatever is outstanding on your current mortgage. The current
monthly payment is$3,120and you have made every payment on time. The original term of
the mortgage was 30 years, and the mortgage is exactly four years
and eight months old. You have just made your monthly payment. The
mortgage interest rate is6.750%(APR). How much do you owe on the mortgage today?
Loan Amortization Schedule for Investment Interest rate Year Beginning Principal Principal Payment Interest Payment Ending principal...
Loan Amortization Schedule for Investment
Interest rate
Year
Beginning Principal
Principal Payment
Interest Payment
Ending principal
Tax Savings
0.07
1
15,000
a.
1,050
b.
c.
0.07
2
0.07
3
0.07
4
0.07
5
0.07
Fill in the blanks. Explain how to get the principal and ending
principal.
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