Given information

Suppose that 10 years ago you bought a home for $140,000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years. Your existing mortgage (the one you got 10 years ago)

This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $108,123 left to pay on your loan. Your house is now valued at $190,000. Your current situation

Refinancing Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate.

Question

A) Analyzing the refinance Notice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you've already been paying, that's 40 years total. How much will you save each month because of the lower monthly payment?

$?

B) How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan) $?

Suppose that 10 years ago you bought a home for $140,000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years. Your existing mortgage (the one you got 10 years ago) How much money did you pay as your down payment? $ 14000 Submit Question Question 2 1/1 pt 2 Details Score on last try: 1 of 1 pts. See Details for more. How much money was your existing mortgage (loan) for? $ 126,000 Submit Question Question 3 3/3 pts 2 Details Score on last try: 3 of 3 pts. See Details for more. What is your current monthly payment on your existing mortgage? $ 838.28 Note: Carry at least 4 decimal places during calculations, but round your final answer to the nearest cent. Submit Question This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $108,123 left to pay on your loan. Your house is now valued at $190,000. Your current situation How much of the original loan have you paid off? (i.e, how much have you reduced the loan balance by? Keep in mind that interest is charged each month - it's not part of the loan balance.) $ 17877 Submit Question Question 6 1/1 pt 2 Details Score on last try: 1 of 1 pts. See Details for more. How much money have you paid the loan company so far (over the last 10 years)? $ 100594 Submit Question Question 7 1/1 pt 2 Details Score on last try: 1 of 1 pts. See Details for more. How much interest have you paid so far (over the last 10 years)? $ 82717 Submit Question Refinancing Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be? $ 648 or Submit Question Question 10 2/2 pts 2 Details Score on last try: 2 of 2 pts. See Details for more. How much interest will you pay over the life of the new loan? $ 125248 Submit Question x Question 11 0/1 pt 2 Details Score on last try: 0 of 1 pts. See Details for more. You can retry this question below Analyzing the refinance Notice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you've already been paying, that's 40 years total. How much will you save each month because of the lower monthly payment? X Question 11 0/1 pt 2 Details Score on last try: 0 of 1 pts. See Details for more. You can retry this question below Analyzing the refinance Notice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you've already been paying, that's 40 years total. How much will you save each month because of the lower monthly payment? $ Submit Question X Question 12 0/1 pt 2 Details Score on last try: 0 of 1 pts. See Details for more. You can retry this question below How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan) $ Submit