A borrower has secured a 30 year, $730,000 loan at 5%. 15 years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 3%. However, the up front fees to refinance, which will be paid in cash, are 5 points.. What is balance of the mortgage after 15 years? What is the amount of the fees? Should the borrower refinance if the borrower expects to remain in the home for the next fifteen years? Should the borrower refinance if she plans to relocate after seven years

A borrower has secured a 30 year, $730,000 loan at 5%. 15 years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 3%. However, the up front fees to refinance, which will be paid in cash, are 5 points.. What is balance of the mortgage after 15 years? What is the amount of the fees? Should the borrower refinance if the borrower expects to remain in the home for the next fifteen years? Should the borrower refinance if she plans to relocate after seven years

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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