Suppose a homeowner has an existing fixed-rate mortgage loan with these terms: remaining balance of $273,473.75,...
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Suppose a homeowner has an existing fixed-rate mortgage loan with these terms: remaining balance of $273,473.75, interest rate of 4.5%, and remaining term of 25 years (monthly payments). The original loan term was 30 years and the original mortgage amount was $300,000. The payment on the existing loan is $1,520.06. This loan can be replaced by a new $273,473.75 monthly payment loan with an interest rate of 3.00% and a loan term of 25 years. The payment on the new loan would be $1,296.84. The total up-front cost of the refinancing would be 4% of the current outstanding loan amount. Assume the homeowner expects to stay in the home an additional five years from today whether she refinances now or not. What is the net present value of refinancing today (rounding to the nearest dollar)? O $1,483 O $13,393 O $7,022 $2,454 O None of the choices is within $10 of the correct answer Suppose a homeowner has an existing fixed-rate mortgage loan with these terms: remaining balance of $273,473.75, interest rate of 4.5%, and remaining term of 25 years (monthly payments). The original loan term was 30 years and the original mortgage amount was $300,000. The payment on the existing loan is $1,520.06. This loan can be replaced by a new $273,473.75 monthly payment loan with an interest rate of 3.00% and a loan term of 25 years. The payment on the new loan would be $1,296.84. The total up-front cost of the refinancing would be 4% of the current outstanding loan amount. Assume the homeowner expects to stay in the home an additional five years from today whether she refinances now or not. What is the net present value of refinancing today (rounding to the nearest dollar)? O $1,483 O $13,393 O $7,022 $2,454 O None of the choices is within $10 of the correct answer
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Answer rating: 100% (QA)
Cost of refinancing Present balance4 273473754 1093895 Difference in monthly payment 1520061296... View the full answer
Related Book For
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
Posted Date:
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