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PART 2 PLEASE Part2 Assume that you chose the 80% LTV mortgage from the previous section, but after 10 years are thinking about refinancing for
PART 2 PLEASE Part2 Assume that you chose the 80% LTV mortgage from the previous section, but after 10 years are thinking about refinancing for $2,500. You will only be in the home for another 5 years. The new loan would be an ARM. Interest rates on 20 -year ARMS are currently 6%. Interest rates are expected to increase to 8% in years 2 and 3 and then to 9% in years 4 and 5. - Find the return on your $2,500 refinancing cost. Should you refinance? - If interest rates rose faster than expected, how might this change your answer? (No calculation is needed. Explain in words.) - How would largor than expected increases in interest rates impact the supply and demand for hiomes? Part 1 You are buying a $350,000 home and are deciding between two fixed rate mortgage options. The 80% LTV option has an interest rate of 8% over 30 years. The 90% LTV option has an interest rate of 8.5% over 30 years with 2 discount points. Part2 Assume that you chose the 80% LTV mortgage from the previous section, but after 10 years are thinking about refinancing for $2,500. You will only be in the home for another 5 years. The new loan would be an ARM. Interest rates on 20 -year ARMS are currently 6%. Interest rates are expected to increase to 8% in years 2 and 3 and then to 9% in years 4 and 5. - Find the return on your $2,500 refinancing cost. Should you refinance? - If interest rates rose faster than expected, how might this change your answer? (No calculation is needed. Explain in words.) - How would largor than expected increases in interest rates impact the supply and demand for hiomes? Part 1 You are buying a $350,000 home and are deciding between two fixed rate mortgage options. The 80% LTV option has an interest rate of 8% over 30 years. The 90% LTV option has an interest rate of 8.5% over 30 years with 2 discount points
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