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Consider a 2 0 - year, $ 1 8 0 , 0 0 0 mortgage with a rate of 6 . 4 percent. Six years
Consider a year, $ mortgage with a rate of percent. Six years into the mortgage, rates have fallen to percent. Suppose the transaction cost of obtaining a new mortgage is $
Should the homeowner refinance at the lower rate?
multiple choice
Yes
No
Quantify the effect of the homeowner's decision.
Note: Do not round intermediate calculations. Round your answer to decimal places.
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mortgage is $
Should the homeowner refinance at the lower rate?
Yes
Quantify the effect of the homeowner's decision.
Note: Do not round intermediate calculations. Round your answer to decimal places
What is the monthly savings for refinancing while also including accounting for the transaction cost?
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