You have a $250,000 remaining balance on your initial 15y mortgage loan. You borrowed in July 2022, when the rate was 5.5%. Five years later, when the inflation is under control (hopefully!), the rates have dropped to 4.5% and your are thinking of re-financing. However, refi involves some costs such as your own time as well as explicit closing costs such as property assessment, underwriter fee, title insurance, etc. You estimate that the total (implicit and explicit) cost of refinancing is $15,000. How much incentives (i.e., free money) should your loan officer offer to you to accept the refining offer?

You have a $250,000 remaining balance on your initial 15y mortgage loan. You borrowed in July 2022, when the rate was 5.5%. Five years later, when the inflation is under control (hopefully!), the rates have dropped to 4.5% and your are thinking of re-financing. However, refi involves some costs such as your own time as well as explicit closing costs such as property assessment, underwriter fee, title insurance, etc. You estimate that the total (implicit and explicit) cost of refinancing is $15,000. How much incentives (i.e., free money) should your loan officer offer to you to accept the refining offer?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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