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You bought a $225,000 house with a $40,000 down payment and financed the remaining $185,000 with a 30-year mortgage (home loan). The interest rate on the loan is 5%.

a) Find the monthly payment.

b) After 12 years of paying on this mortgage, you decide to explore refinancing. With 18 years left to go, what is your remaining loan balance?

c) If you do refinance the amount from part (b) with a new 15-year loan at 3% interest, how much will your monthly payments be?

d) Bonus question (optional): How much interest do you save by refinancing? (You will need to find the total interest paid under each option. Remember to take the first 12 years of payments into account.)

Expert Solution

ekkarill92 answered 1 year ago

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