Suppose that you are currently making monthly payments on a $317,400 25-year mortgage at 5.43% interest...

Suppose that you are currently making monthly payments on a $317,400 25-year mortgage at 5.43% interest compounded monthly. For the last 9 years, you have been paying the regular monthly payments. You now have the option to refinance your current mortgage with a new 20-year mortgage that has an interest rate of 5.06% compounded monthly. The lender of the new loan has a closing cost fee of $1,900 (for title insurance, home appraisal coasts, etc.) for the new (refinanced) mortgage. The lender stipulates that closing cost must be paid in cash and cannot be part of the new loan. You are to determine whether you would save or lose money in interest if you were to refinance your home. Take the closing costs into account when determining if you would save or lose money.

Solutions

Expert Solution

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Suppose that you are currently making monthly payments on a $350,000 30-year mortgage at 4.89% interest...

Suppose that you are currently making monthly payments on a $350,000 30-year mortgage at 4.89% interest compounded monthly. For the last 5 years, you have been paying the regular monthly payments. You now have the option to refinance your current mortgage with a new 30-year mortgage that has an interest rate of 4.26% compounded monthly. Note that the lender of the new loan has a closing cost fee of $2,000 (for title insurance, home appraisal costs, etc.) for the new...

A $86,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is...

A $86,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 5.1% compounded semi-annually for a six-year term. (a) Compute the size of the monthly payment. (b) Determine the balance at the end of the six-year term. (c) If the mortgage is renewed for a six-year term at 6% compounded semi-annually, what is the size of the monthly payment for the renewal term? (a) The size of the monthly payment is $__. (Round the final...

A $95,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is...

A $95,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 8.6% compounded semi-annually for a six-year term. (a)Compute the size of the monthly payment. (b) Determine the balance at the end of the six-year term. (c)If the mortgage is renewed for a six-year term at 6% compounded semi-annually, what is the size of the monthly payment for the renewal term? (a) The size of the monthly payment is $__.(Round the final answer to the...

Dave currently makes monthly payments towards a 25-year mortgage of $290000 with an interest rate of...

Dave currently makes monthly payments towards a 25-year mortgage of $290000 with an interest rate of 13.2% compounded monthly. After making the 65th payment, Dave refinanced his mortgage at an interest rate of 8.4% compounded monthly and renegotiated his term. This resulted in Dave's monthly payments being reduced by $400. How large will Dave's final drop payment be?

An $600,000 Mortgage is amortized by monthly payments over 25 years. The interest rate charged is...

An $600,000 Mortgage is amortized by monthly payments over 25 years. The interest rate charged is 4% compounded semi-annually. 1.What is the size of the monthly payment to the nearest dollars? 2.How much interest paid in the first payment? 3.What is the outstanding balance after the first payment?

A lender makes a 100,000 mortgage at 12% interest with monthly payments for 25 years. How...

A lender makes a 100,000 mortgage at 12% interest with monthly payments for 25 years. How much principal will be repaid during the 10th year of the loan? How much interest will be paid during the 10th year of the loan? Show Calculations using a financial calculator. (i.e. I=?, PMT=? etc)

The Grewals agreed to monthly payments on a mortgage of $363,000.00 amortized over 25 years. Interest...

The Grewals agreed to monthly payments on a mortgage of $363,000.00 amortized over 25 years. Interest for the first five years was 4.3% compounded semi-annually. a. Determine the Grewals’ monthly payments. b. Determine the balance owing after the 5-year term. c. Before renewing for another term of 5 years at 4.5% compounded semiannually, the Grewals make an additional payment of $21,000. If they keep the same monthly payments, by how much will the amortization period be shortened? note; sir i...

A lender originates a $90,000 mortgage at 9% APR interest, with monthly payments for 25 years....

A lender originates a $90,000 mortgage at 9% APR interest, with monthly payments for 25 years. How much principal will be repaid during year 4 of the loan? (note: use the amortization schedule in your calculator ) -7,787 -1,376 -7,749 -4,617.57 -1,314

Consider a $5,000,000, 9%, 25-year mortgage with monthly payments. Compute the first three payments and the...

Consider a $5,000,000, 9%, 25-year mortgage with monthly payments. Compute the first three payments and the loan balance after the third payment for each of the following loan types: (a) Interest-only, (b) CAM, (c) CPM.

A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The...

A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $200,000 at 6% interest for 20 years. How would you analayze these alternatives?

Subjects