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Math of Finance Alex is paying 1184.87 in monthly mortgage payments. She wants to refinance her...

Math of Finance

Alex is paying 1184.87 in monthly mortgage payments. She wants to refinance her existing mortgage loan of $100,000 at 14% interest for 30 years that she obtained 4 years ago. Her mortgage officer informed her that he could get her a rate of 10% but the finance cost would include paying a prepayment penalty on the existing loan, which is equal to 6 months interest on the balance of the loan, plus a closing cost of $2000. Would it be worth if for Alex to refinance?

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!! PLEASE VOTE WITH MANY THUMBS UP !!

Colby Messinger answered 2 weeks ago
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