Question
Mr. X Obtained a 25-year $100,000 mortgage with a 7.5% interest rate. Interest rates fell just after Mr. X got it. Therefore, I am considering
Mr. X Obtained a 25-year $100,000 mortgage with a 7.5% interest rate. Interest rates fell just after Mr. X got it. Therefore, I am considering refinancing the $100,000 balance with a 30 yr loan with a 5.5% interest rate. If Mr. X refinances it will cost $3,000 but my payments will be lower. Is it worth it? Any invested cash returns 5%.
Step by Step Solution
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Step: 1
To determine whether it is worth refinancing the mortgage we need to compare the total cost of the c...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
