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A borrower got a mortgage loan 5 years ago for $ 4 1 0 , 0 0 0 at 6 % interest for 3 0
A borrower got a mortgage loan years ago for $ at interest for years with no prepayment penalties or closing costs. The borrower just got a call from her friendly mortgage broker suggesting she refinance into an ARM indexed to oneyear Treasury yields with an margin The ARM has a year amortization. The ARM has teaser rate of a fully adjusted rate of and closing costs of $
The borrower plans to move to San Antonio, TX when she retires in years. When she moves she must payoff all outstanding mortgages. Should she do the refinance use the IRR & NPV assume the discount rate or opportunity cost of capital of criteria to make the decision?
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