Rachel and Tom Baker are your friends with whom you have attended the same Bible study for

several years. You are a mortgage originator for the XYZ Mortgage Brokerage, Inc., and the

Bakers have come to you for advice concerning the possibility of refinancing their existing

mortgage. Their current $30-$year, fixed$-$rate mortgage was originally issued for $$300,000$ at a rate

of $6\mathrm{.}000\%.$ They have owned their home for $15$ years and their current mortgage balance is

$$213,150.$ You have identified the following mortgage options for the Bakers:

$30-$Year Fixed$-$Rate; $5\mathrm{.}125\%$; $$1,000$ cash required at closing

$15-$Year Fixed$-$Rate; $4\mathrm{.}500\%$; $$5,000$ cash required at closing

$5/1$ ARM; $4\mathrm{.}375\%(2\%$ cap per year; $10\%$ life$)$; $$4,500$ cash required at closing

The owner of XYZ has been particularly vocal about the need to maximize profits for the firm

given the continued lag in the real estate market. Your firm stands to collect the following fees

$($including fees paid by the mortgage lender directly to your company$)$ associated with each of

the mortgage options, as follows:

$30-$Year Fixed$-$Rate $$ $$4,000$

$15-$Year Fixed$-$Rate $$ $$3,750$

$5/1$ ARM $$ $$4,250$

As a principled Christian, you are guided by your desire to provide excellent service to your

customers but, of course, you must also make money for your employer and yourself $($your

salary is $100\%$ commission$-$based$).$ In reviewing the Bakers$$ financial situation, you find that

their credit ratings are very high and that they are well qualified to refinance their mortgage at

the most favorable rates available.

Address the items below in an APA$-$formatted, MS Word document:

$$ Analyze the risk$-$return trade$-$off for each option and justify your advice with financial

calculations, as well as$,$ logical$,$ ethical, and Biblical considerations.

$$ What advice will you give to the Bakers concerning their interest in refinancing their

existing mortgage? Explain your recommendation