Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate.If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.
Your existing mortgage (the one you got 10 years ago)
This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000.
Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate.
If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
