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Do the above question on the excel, please A client took out a $250,000, thirty-year, 4.00% fixed rate mortgage loan ten years ago. She is
Do the above question on the excel, please
A client took out a $250,000, thirty-year, 4.00% fixed rate mortgage loan ten years ago. She is asking you whether she should consider refinancing the outstanding loan balance. She wants to keep the maturity date the same and does not plan to borrower any more money. The new interest rate would be 3.76%. The cost to refinance is $1,200. Calculate the existing loan's debt service (PMT), outstanding balance (FV), and balance if outstanding for five more years (FV). Calculate what would be the new loan's payment (PMT) and what would be the outstanding loan balance five years from now (FV) What is the current debt service payment? What is the outstanding loan balance? What is the amount of savings if the loan is refinanced; i.e., the payment differential? What is the expected return "on" the investment? If her required return is 13%, do you recommend that she refinance? How does your recommendation change if she only expects to be in the home for three more yearsStep by Step Solution
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