Consider the following scenario:

Changing interest rates create opportunities for homeowners to gain an advantage by refinancing their homes. For this part of the assessment, use the following scenario to consider this issue.

Imagine you have a $100,000 mortgage. Your current loan is at 7 percent with 14 years left, negotiated one year ago and involving $2,000 in closing costs. You are considering refinancing at 5.5 percent for 15 years. The closing costs would be $1,500.

Would you decide to refinance? Why or why not?

What qualitative considerations would you consider in your decision to refinance or not refinance?

Provide examples of calculations you would use to help you make your decision.