Please review the financial status and situations of the couple and suggest an optimum mortgage plan for them.

. egg, and Edmond purchased their home for $350,000 six years ago, but the value of the property has grown to $500,000 since then. The outstanding mortgage balance is $318,000, with mortgage annual interest rate of 4.29 percent. Now that Peggy and Edmond are expecting their third child, they need more space. The couple has you, as a personal financial planner, to help them understand the financing options for purchasing a new $800,000 property. Real estate fees on the sale of their cun'ent property are expected to equal four percent of the sale price. However, they don't expect to sell their current home before November. The qualifying rate for mortgage applications is five percent. Bridge loans are available at a variable rate of ve percent and prevailing mortgage rates are as follows: Bank A Bank B Bank C One-year xed rate 6.3% p.a. 6.3% p.a. 6.3% p a Four-year fixed rate nfa 3.75% p.a. nla p.a. Five-year xed rate 3.99% pa m'a nfa p.a. Variable rate Prime Rate minus Prime Rate minus Prime Rate minus 2.25% p.a.* 2.25% p.a.\" 2.25% p.a.\" "Prime rate = 5.25% p.a. If Peggy and Edmond pay out their current mortgage on the sale of their home, and take a new mortgage with a lower interest rate, they will be required to pay a penalty of $4.128