Should you refinance your mortgage? If you have an adjustable rate mortgage and plan on keeping your house, yes. If you can reduceyour fixed interest rate by 1-2%, yes. If you have a high interest rate second mortgage and the balance is large, yes. Brett Gardner andNellie Viner are remodeling their home. They took out a second mortgage for $120,000 at 4.5% for 10 years. Their first mortgage is$390,000 at 3% for 25 years. Should they refinance both mortgages into one 30-year mortgage at 2.875% ? (Use the Table 15.1)Note: Do not round intermediate calculations. Round your answers to the nearest cent.Interest option 1Interest option 2Should you refinance your mortgage? PERALDRate2.0002.1252.2502.3752.5002.6252.7502.8753.0003.1253.2503.3753.5003.6253.7503.8754.0004.1254.2504.3754.5004.6254.750InterestOnly0.166670.177080.187500.197920.208330.218750.229170.239580.250000.260420.270830.281250.291670.302080.312500.322920.333330.343750.354170.364580.375000.385420.3958310 Year9.201359.257439.313749.370269.426999.483949.541109.598489.656079.713889.771909.830149.888599.9472510.0061210.0652110.1245110.1840310.2437510.3036910.3638410.4242010.4847715 Year20 Year25 Year6.435095.058834.238546.492815.118254.299666.550855.178084.361316.609215.238344.423486.667895.299034.486176.726895.360144.549386.786225.421664.613116.845865.483614.677356.905825.545984.742116.966095.608764.807387.026695.671964.873167.087605.735574.939457.148835.799605.006247.21037 5.86404 5.073527.272225.928885.141317.334405.994145.209597.396886.059805.278377.459686.125875.347637.522786.192345.417387.586206.259225.487617.649936.326495.558327.713976.394175.629517.778326.462245.7011730 Year3.696193.759023.822463.886533.951214.016514.082414.148924.216044.283754.352064.420964.490454.560514.631164.702374.774154.846504.919404.992855.066855.141405.2164740 Year3.028263.094443.161423.229213.297783.367143.437283.508183.579843.652263.725413.799303.873913.949234.025264.101984.179384.257464.336204.415594.495634.576294.65758

A mortgage refers to a loan that has been taken out to purchase real estate. The real estate being…

Should you refinance your mortgage? If you have an adjustable rate mortgage and plan on keeping your house, yes. If you can reduce your fixed interest rate by 1-2%, yes. If you have a high interest rate second mortgage and the balance is large, yes. Brett Gardner and Nellie Viner are remodeling their home. They took out a second mortgage for $120,000 at 4.5% for 10 years. Their first mortgage is $390,000 at 3% for 25 years. Should they refinance both mortgages into one 30-year mortgage at 2.875% ? ( Use the Table 15.1) Note: Do not round intermediate calculations. Round your answers to the nearest cent. Interest option 1 Interest option 2 Should you refinance your mortgage?

Should you refinance your mortgage? If you have an adjustable rate mortgage and plan on keeping your house, yes. If you can reduce your fixed interest rate by 1-2%, yes. If you have a high interest rate second mortgage and the balance is large, yes. Brett Gardner and Nellie Viner are remodeling their home. They took out a second mortgage for $120,000 at 4.5% for 10 years. Their first mortgage is $390,000 at 3% for 25 years. Should they refinance both mortgages into one 30-year mortgage at 2.875% ? ( Use the Table 15.1) Note: Do not round intermediate calculations. Round your answers to the nearest cent. Interest option 1 Interest option 2 Should you refinance your mortgage?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter9: Obtaining Affordable Housing

Section: Chapter Questions

Problem 2DTM

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Similar questions

Arthur is planning on buying a house and needs to take out mortgage for $200,000 . He has two choices a 30 year with monthly payments of $1,468 and a 15 years with monthly payments of 1,854 . Arthur want to pay the Lowest interest rate possible What is interest rate on each mortgage and which mortgage should he pick? He changes his mind and want to pay the smallest amount of total interest. What are the total interest charges for each mortgage and which mortgage should he pick now ?
You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 15-year mortgage at 3.25% annual interest rate for the cost of the house after they receive a 20% down payment. At the end of the 15-years, how much total money will you have paid to Bank of America for your home? In another word how much did the $415,000.00 house really cost the couple?
Justin and Hayley are interested in a fixed-rate mortgage for $450,000. They are undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 3.5% for the 15-year mortgage, and 3.85% for the 30-year mortgage (a) What are the monthly principal and interest payments for EACH loan? (b) What is the total amount of interest paid on EACH loan? (c) Overall, how much more interest is paid by choosing the 30-year mortgage?
Show all workings and make explanations when necessar You bought your house five years ago and you believe you will be in the house only about five more years before it gets too small for your family. Your original home value when you bought it was $500,000, you paid 10 percent down, and you financed closing costs equal to 3 percent of the mortgage amount. The mortgage was a 25-year fixed-rate mortgage with a 5 percent annual interest rate. Rates on 30-year mortgages are now at 3 percent. Your total refinancing costs will be 3 percent of the new mortgage amount. A new down payment is not required. Should you refinance?
Janelle has a 30-year mortgage, but instead of making monthly payments, she is making rising payments every two years. As a result, she will end up repaying her loan in less than 30 years. Janelle’s loan is an example of a(n) A : growing equity mortgage. B : reverse annuity mortgage. C : adjustable rate mortgage. D : graduated payment mortgage.
Chelsea and Bill are buying a house on a 30-year mortgage. They can afford a $1200 per month mortgage payment. If their loan as an interest rate of 4.25%, what is the maximum purchase price of a house that they can afford?
A while ago, a couple purchased a home with a sales price of $850,000, making a 15% down payment and financing the rest with a 30-year adjustable rate mortgage fixed at 3.5% for the first nine years. Now that the fixed rate period is up, the couple is facing a higher adjustable rate. They now plan to refinance into a fixed rate 15-year mortgage at 5.2%, allowing them to pay it off before they retire. What will their new monthly payments be? Assume there are no costs associated with the refinance.
The McBertys have "$20, 000" in savings to use as a down payment on a new home. They also have determined that they can afford between "$1, 600 and $1,900" per month for mortgage payments. If the mortgage rates are 11% per year compounded monthly, what is the price range for houses they should consider for a 30 - year loan?
You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year mortgage at 3.25% annual interest rate for the cost of the house after they receive a 20% down payment. How much interest will they have paid? How many of her monthly payment go toward the interest? What percent increase over the cost of the home does this interest represent? Redo and re-answer all questions, but this time for 15 years?
You are buying a house and the mortgage company offers to let you pay a "point" (1% of the total amount of the loan) to reduce your APR from 6.50% to 6.25% on your $400,000, 30-year mortgage with monthly payments. If you plan to be in the house for at least five years, should you do it?
Ingrid is considering refinancing her mortgage. She currently has 120 payments of $987 left on her fully amortizing loan. A lender is offering her a new fully amortizing mortgage on the remaining balance for 10 years (also 120 payments) that will have a payment of $870. Ingrid is not planning to ever move from her house. What is the highest refinancing cost today that Ingrid is willing to pay and still choose to refinance if her discount rate is 8%? State your answer as a number rounded to two decimal points
The Jeffersons are considering selling their current residence, buying a small home near Avery’s parents for $220,000 with a $100,000 30-year mortgage at 3.5%, and investing the net proceeds in their retirement accounts and education accounts. They assume they will incur 2% in transaction costs for the purchase and 6% for the sale. They have asked you the following: What will their monthly payment (principal and interest only) be on their new home if their new mortgage is the 3.5% on $100,000 for 30 years that they project? How much cash would they have available for other goals if they sell their old house for $330,000 and buy a new house for $220,000? Assume the mortgage they pay off is $56,000 and they pay the transaction costs for both homes from the proceeds of the sale of their current home. Also assume they take a $100,000 mortgage on the new home. If the Jeffersons purchase the new house and start a $100,000 30-year mortgage at 3.5% one year from today, what will be the…