The Family

Alan and Angel Young both 36 years old

My Young recently accepted a job making $93K a year

Mrs. Young currently unemployed

Two children (ages 4 & 2)

Economic Info

Inflation averages 3% for last 20 years and expected to continue at 3%

Bank lending rates: 15 year 3.25%; 30 year 3.75%; Any closing costs associated with refinance are 3% and included in refinanced mortgage

Expected rate of return 8.5%

Residence

Current value $550K; Balance on 30 year mortgage at 5.5% $260,514; Land value $150K; Monthly payment (P&I) $1703.37; Owned home for 8 years; Not qualify for refi until Mr Young in new job 1 year

Calculate the following & comment (show calculations):

15-Year mortgage refinance and savings = ?