A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments...

A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments and compounding. After making your final payment in year 5, interest rates have fallen to 4% and you are considering refinancing.

What is your monthly mortgage payment under the initial loan?

What would be your new monthly mortgage payment after refinancing?

If the refinancing cost is 2% of the remaining balance on your loan, how much longer would you need to remain in your house before refinancing paid itself off?

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

TIME VALUE OF MONEY IS NOT CONSIDERED IN CALCULATING THE LAST QUESTION AS NOTHING WAS MENTIONED

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Suppose you take a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments. A....

Suppose you take a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments. A. (1 pt) How much of the payment is interest for month 100? B. (1 pt) How much total interest do you pay in the first six years?

) A $30 000.00 mortgage is amortized by monthly payments over twenty years and is renewable...

) A $30 000.00 mortgage is amortized by monthly payments over twenty years and is renewable after five years. a) If the interest rate is 8.5% compounded semi-annually, calculate the outstanding balance at the end of the five-year term. b) If the mortgage is renewed for a further three-year term at 8% compounded semi-annually, calculate the size of the new monthly payment. c) Calculate the payout figure at the end of the three-year term.

You just took a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments, two...

You just took a fixed-rate mortgage for $250,000 at 4.50% for 30 years, monthly payments, two discount points. Before you make any payments you receive a nice raise so you plan to pay an extra $160 per month on top of your normal payment. A. (1 pt) How many monthly payments do have to make at the higher payment to fully amortize the loan? B. (1 pt) What is your net interest savings over the life of the loan, assuming...

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?

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...

The Grewals agreed to monthly payments on a mortgage of $336,000.00 amortized over 20 years. Interest...

The Grewals agreed to monthly payments on a mortgage of $336,000.00 amortized over 20 years. Interest for the first five years was 4.5% 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 4.3% compounded semiannually, the Grewals make an additional payment of $12,000. If they keep the same monthly payments, by how much will the amortization period be shortened?

A) For a loan of $160,000 at 7% annual interest, monthly payments, for 30 years, how...

A) For a loan of $160,000 at 7% annual interest, monthly payments, for 30 years, how much total interest will be paid over the life of the loan? Group of answer choices $279,785.00 $81,002.00 $223,214.00 $265,778.00 B) For a loan of $250,000 at 6% annual interest, with monthly payments over 15 years, if you pay an additional $100 in principle per month, how much total interest will you pay over the life of the loan? Group of answer choices $218,090.00...

1. Sam borrows $1,000,000 by a mortgage with annual payments over 30 years at a rate...

1. Sam borrows $1,000,000 by a mortgage with annual payments over 30 years at a rate of 9.75% per annum interest. What are his annual payments? what is the remaining balance on his loan after 5 years? 15 years? Suppose that 10 years after Sam takes out the loan, the mortgage is sold to an investor who requires a 10.5% rate of return on investments, how much is the investor willing to pay for the loan?

You currently have a 30-year mortgage with annual payments of $6000. Annual interest rate is 8%....

You currently have a 30-year mortgage with annual payments of $6000. Annual interest rate is 8%. In how many years, the balance on your mortgage will drop to half of its current value? Round your result to two decimal places (i.e., if the result is 7.6542, enter it as 7.65).

You take out a $250,000 30 year mortgage with monthly payments and a rate of 10%,...

You take out a $250,000 30 year mortgage with monthly payments and a rate of 10%, monthly compounded. What will your mortgage balance be after your first year of making your monthly payments? How much total interest you paid on this mortgage? work out on a financial calculator. explain the steps to take please.

Subjects