Suppose that you purchased a house with a $140,000 mortgage (30-year fixed at 6% with a payment of $839.37) five years ago. The loan balance is currently $130,276 and you can refinance that balance at 5% with a new 30-year fixed rate mortgage. You anticipate being in the house for another six years, at which point the balance on your current mortgage would be $114,032. If you refinanced at the terms above, what would be the difference in the loan balances? O $1,329 O $1,871 O $2,471 O $3,132 O $3,860

Suppose that you purchased a house with a $140,000 mortgage (30-year fixed at 6% with a payment of $839.37) five years ago. The loan balance is currently $130,276 and you can refinance that balance at 5% with a new 30-year fixed rate mortgage. You anticipate being in the house for another six years, at which point the balance on your current mortgage would be $114,032. If you refinanced at the terms above, what would be the difference in the loan balances? O $1,329 O $1,871 O $2,471 O $3,132 O $3,860

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

You have been asked to determine whether it is beneficial for a homeowner to refinance their current mortgage loan. Their loan for 200,000 was originated three years ago and was a 30 year FRM with an interest rate of 7.5%. Their mortgage payment is currently $1,398.43. This loan now currently has 27 years remaining, and the homeowner is looking to refinance their current balance (i.e. the balance at the end of month 36) into a new 27 year FRM with an interest rate of 5.5%. How much will the homeowner save in interest over the 27 years remaining, assuming no prepayments? Round to the nearest dollar.
← You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is %. (Round to four decimal places as needed.)
You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $1,976 and you have made every payment on time. The original term of the mortgage was 30 years, and the mortgage is exactly four years and eight months old. You have just made your monthly payment. The mortgage interest rate is 6.037% (APR). How much do you owe on the mortgage today? The amount you owe today is $ (Round to the nearest dollar) Cara
Suppose a.home owner has an existing mortgage loan with these terms: remaining balance of Sh. 50,000, interest rate of 8% and remaining term of 10 years (monthly payments). The loan can be replaced by a loan at an interest rate of 6% at a cost of 8% of the outstanding loan amount Should the home owner refinance? What difference would it make if the home owner expecis to be in the home for only five more years?.
Suppose you took out a 25 year mortgage at 2.32% to purchase a home, making monthly payments of $2100. After 5 years and 6 months you are able to refinance for 20 years at 2.15%, making monthly payments of $1950. How much do you save on interest by refinancing?
Suppose you take out a 30 year mortgage for $ 225000 at 6% interest. The monthly payments on this loan are $ 1348.99. If you pay an extra 20% per month on your mortgage, how soon will you pay off the loan?
Your new 30-year mortgage includes borrowing $425,000 at an APR of 4.78%. If you paid 20% down when you bought this house, and if the value of the property grows at about 3.0% a year, how much will you have to invest if you seel the house after 14 years? (Ignore here any taxes or fees on the purchase or sale of the house.)
Suppose you take out a 30 year mortgage for $ 250000 at 4% interest. The monthly payments on this loan are $ 1193.54. If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan? How much will you save in interest by making the extra payments? If you put $ 1193.54 per month into an annuity earning 7.25% interest compounded monthly for the remaining time on your original loan, how much money will you have at the end of the original 30 years?
You are considering buying a new house, and have found that a $250,000, 30-year fixed-rate mortgage is available with an interest rate of 8 percent. This mortgage requires 360 monthly payments of approximately $1,786 each. If the interest rate rises to 9 percent, what will happen to your monthly payment?
A borrower has secured a 30 year, $154,00O loan at 7% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 6%. However, the new loan requiers the borrower to pay 2 points at chopsing. What is the return on investment if the borrower expects to remain in the home for the next fifteen years? Please input your answer as an annual interest rate (i.e. 8.32% would be input as 8.32).
You have just taken out a mortgage of $50,000 for 30 years, with monthly payments at 6% interest. The same day you close on the mortgage you receive a $25,000 gift from your parents to be applied to the mortgage principal. What amount of time will now be required to pay off the mortgage if you continue to make the original monthly payments? What is the amount of the last payment? (Assume any residual partial payment amount is added to the last payment.)

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