A borrower made a constant payment mortgage loan 8 years ago for $400,000 at 12 percent interest for 30 years. 1. What is the monthly payment? 2. What is the current loan balance? 3. Assume this is homeowner has been offered a chance for refinance for the amount at the current balance for 22 years at 10.5% interest rate. What is the monthly payment if the homeowner chooses to refinance?
A borrower made a constant payment mortgage loan 8 years ago for $400,000 at 12 percent interest for 30 years.
1. What is the monthly payment?
2. What is the current loan balance?
3. Assume this is homeowner has been offered a chance for refinance for the amount at the current balance for 22 years at 10.5% interest rate. What is the monthly payment if the homeowner chooses to refinance?
4. If the origination fees and closing costs are $25,500, and the costs are not financed by the lender. What is the effective cost of refinancing? Should this homeowner refinance?
5. If this homeowner plans to sell the house in 5 years, should this homeowner refinance (show your answer with the effective annual rate)?
use excel to get the answers and show the formulas
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 6 images
