This is all one question

You are a loan officer at Bunnyburrow Credit Union. You receive the following e-mail from Mrs. Bonnie Hopps.

Dear Sir or Madame, My husband and I are long time customers of this credit union. I just got our most recent mortgage statement, and it says our balance is $139, 581. We just celebrated 5 years of living in this house and the mortgage was for $150,000shouldnt our balance be $125,000? Have we been paying extra fees? We managed to save up an extra $10,000. If we put that towards the mortgage, would our mortgage payments drop or would our mortgage just end faster? If our mortgage would end faster, when would it end? Would we save any money? Ive been seeing mortgage advertisementsthey all seem to be advertising rates of around 5%? Would we be eligible for refinancing? Why are they lower now? Thank you for your help. Sincerely, Bonnie Hopps

You look up Mrs. Hopps loan. She and Mr. Stu Hopps are 5 years into a 30 year mortgage for $150,000 at 6%, compounded monthly. They are eligible for a 4.8% interest rate. However, the refinancing process would cost $5000. Write an e-mail to Mrs. Hopps that does the following:

-Explains why her loan balance isnt going down as quickly as she expected.

-Calculates how much money she would save with a one time payment and when her loan would end with the additional payment. Remember to explain why she would save money.

Note: the balance would be reduced, but the monthly payment amount would remain the same.

To figure out how much she would save, compare the amount of interest she would pay, with and without the one time payment

-Calculates how much money Mrs. Hopps would save if she refinanced at 4.8%, with and without the $10,000 payment.

Recall that refinancing costs $5000

Youre welcome to look at either a 25 year loan or a 30 year loan (or both). 30 is more typical, but 25 is not unheard of.

-Informs Mrs. Hopps of her options and advises her on what you think is the best path for her.

Youll need to explain your numbers for the second and third main bullet points--you can make a partial amortization schedule chart to illustrate or put calculations in a footnote or a separate attachment.

If you google how to write customer-service e-mails, you can find some nice communication tips.