In an environment of falling interest rates, many people consider refinancing their mortgages in order to save money on interest. However, there are fees involved with refinancing. One rule of thumb is that you should once your mortgage if the new interest rate is at least 2% lower than your current rate. That differential should be enough to cover any fees AND create a cost savings. Verify this logic. That is, assume that you have a 30-year mortgage (monthly payments) at 5% interest. You have made 12 (out of 360 ) payments and the initial loan amount was $100,000. You are considering two loans: 1) Loan A has a 4% interest rate and upfront fees of 1% of the current loan balance but those fees would be added to the loan amount and amortized over the life of the loan. The new loan would have a 30-year (360 month) term. 2) Loan B has a 3\% interest rate and upfront fees of 2% of the current loan balance but those fees would be added to the loan amount and amortized over the life of the loan. The new loan would have a 30-year (360 month) term. Does it make sense to refinance the existing loan given these two options? If so, which option (1 or 2 ) is better? Explain. Note: you will need to calculate the monthly payment and current balance on the existing loan first