Question
Q30 Consider a 25-year, $210,000 mortgage with a rate of 6.7 percent. Five years into the mortgage, rates have fallen to 5.4 percent. Suppose the
Q30
Consider a 25-year, $210,000 mortgage with a rate of 6.7 percent. Five years into the mortgage, rates have fallen to 5.4 percent. Suppose the transaction cost of obtaining a new mortgage is $2,300.
a. Should the homeowner refinance at the lower rate?
multiple choice
-
Yes
-
No
b. Quantify the effect of the homeowner's decision. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Monthly Savings:
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Investments
Authors: Zvi Bodie
12th Edition
1260819426, 9781260819427
