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The mortgage on your house is five years old. It required monthly payments of $1,422, had...
The mortgage on your house is five years old. It required monthly payments of $1,422, had an original term of 30 years, and had an interest rate of 10% (APR). In the intervening five years, interest rates have fallen and so you have decided to refinance - that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-years term, requires monthly payments, and has an interest rate of 5.625% APR.
a.) What monthly rates will be required with the new loan?
b.) If you still want to pay off the mortgage in 25 years, what monthly payment should you make after you refinance?
c.) Suppose you are willing to continue making monthly payments of $1,422. How long will it take you to pay off the mortgage after refinancing?
d.) Suppose you are willing to continue making monthly payments of $1,422 and want to pay off the mortgage in 25 years, How much additional cash can you borrow today as part of the refinancing?
a. What monthly repayments will be required with the new loan? The monthly repayments with the new loan will be $nothing. (Round to the nearest cent.)
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jeff jeffy answered 2 years agoRelated Solutions
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monthly payments of
$1,450,
had an original term of 30 years, and had an interest rate
of
8%
(APR). In the intervening five years, interest rates have
fallen and so you have decided to
refinance—that
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