Tom Falkland is considering refinancing his home mortgage to reduce his house payment by $89 per...
Tom Falkland is considering refinancing his home mortgage to reduce his house payment by $89 per month. Closing costs associated with the refinancing will total $5,429. Tom will finish medical school in 4 years, at which time he will sell the house and move to another state.
(a) What is the payback period for refinancing this loan?
Payback period months=
(b) Given Tom’s plans, should he refinance his mortgage at this time?
Homework Answers
| a.Payback period for refinancing = $5,429 / $89=61 Month |
| Hence, Payback period for refianancing is 61 Month |
| b. Tom's will finish graduate school in 4 years, at which time he will sell the house and move to another state. |
| So total Time in school = 4 × 12 month= 48 Month |
| Since, Payback period is more than time in spend in college. So he should not refinance. |
Add Answer to:
Tom Falkland is considering refinancing his home mortgage to
reduce his house payment by $89 per...
You are considering refinancing your home. Under the original terms of your mortgage you borrowed $250,000...
You are considering refinancing your home. Under the original terms of your mortgage you borrowed $250,000 to be repaid with equal monthly payments over 30 years. The APR on the loan was 4.5%. You have 20 years of payments remaining. If you now can refinance the remaining loan with no prepayment penalties at a 3.5% APR by how much will your monthly payment drop? What is the present value of your savings if your opportunity cost is represented by an...
Question: Suppose your friend April is considering to refinance her mortgage. She bought her house 60...
Question: Suppose your friend April is considering to refinance her mortgage. She bought her house 60 month... Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months ago. The amount of loan equals 196,000. She paid cash to cover the 5% down payment plus all required closing costs (closing costs include application fee, appraisal fee, loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit...
Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months...
Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months ago. The amount of loan equals 154,00. She paid cash to cover the 5% down payment plus all required closing costs (closing costs include application fee, appraisal fee, loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years at the time of...
Part II -Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought...
Part II -Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months ago. The amount of loan equals 154,000. She paid cash to cover the 5% down payment plus all required closing costs (closing costs include application fee, appraisal fee, loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years...
Dan had difficulty making the mortgage payments on his house, and the mortgage company, Leader Mortgage,...
Dan had difficulty making the mortgage payments on his house, and the mortgage company, Leader Mortgage, was not sympathetic. In the end, Dan lost the house. Several years later, Dan's brother Jeremy bought a house. Following Dan's advice, he would not even consider getting his mortgage through Leader Mortgage. After shopping around, he secured his mortgage through Provident Home Mortgage. At the time, he told the agent about Dan's experience with Leader and gave that as one of the reasons...
Part II-Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought her...
Part II-Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought her bonge 60 months ago. The amount of loan equals 154,000. She paid cash to cover the 5% down payment plus all required closing costs closing costs include application fee, appraisal fee. loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years at...
Dave takes out a 23-year mortgage of 290000 dollars for his new house. Dave gets an...
Dave takes out a 23-year mortgage of 290000 dollars for his new house. Dave gets an interest rate of 14.4 percent compounded monthly. He agrees to make equal monthly payments, the first coming in one month. After making the 70th payment, Dave wants to buy a boat, so he wants to refinance his house to reduce his monthly payment by 400 dollars, and to get a better interest rate. In particular, he negotiates a new rate of 7.2 percent compounded...
Arnold has two loan alternatives to finance his home mortgage. The house he is interested in...
Arnold has two loan alternatives to finance his home mortgage. The house he is interested in is for sale for $ 180,000, but he can give a prompt payment of $ 35,000. Dollar Bank offers a loan for the balance of the debt at an effective annual interest rate of 3.0% (APY), which is based on monthly payments. The loan is expected to be repaid in 15 years. The Super Cooperative offers a 3.5% annual compound rate per month and...
Johnny Bravo has two loan alternatives to finance his home mortgage. The house that you interest...
Johnny Bravo has two loan alternatives to finance his home mortgage. The house that you interest is for sale for $ 180,000, but he can give a prompt payment of $ 35,000. The Little Giving Bank offers you a loan for the balance of the debt at an effective annual interest rate of 3.0% (APY). the which is based on monthly payments. The loan is expected to be repaid in 15 years. The Cooperative Super Peso offers a compound annual...
Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan...
Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan amount is $300,000 with a 3% annual interest rate. After 28 years, you would like to sell the property. What is your loan balance at the end of 28 years? Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan amount is $300,000 with a 3% annual interest rate and your balloon payment is $50,000. What is your...
Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months ago. The amount of loan equals 154,00. She paid cash to cover the 5% down payment plus all required closing costs (closing costs include application fee, appraisal fee, loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years at the time of...
Part II -Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought her house 60 months ago. The amount of loan equals 154,000. She paid cash to cover the 5% down payment plus all required closing costs (closing costs include application fee, appraisal fee, loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years...
Dan had difficulty making the mortgage payments on his house, and the mortgage company, Leader Mortgage, was not sympathetic. In the end, Dan lost the house. Several years later, Dan's brother Jeremy bought a house. Following Dan's advice, he would not even consider getting his mortgage through Leader Mortgage. After shopping around, he secured his mortgage through Provident Home Mortgage. At the time, he told the agent about Dan's experience with Leader and gave that as one of the reasons...
Part II-Mortgage Refinance Suppose your friend April is considering to refinance her mortgage. She bought her bonge 60 months ago. The amount of loan equals 154,000. She paid cash to cover the 5% down payment plus all required closing costs closing costs include application fee, appraisal fee. loan origination fees and other costs, usually about 3%-5% of the loan amount). Since she had a decent credit history and relatively stable income, her mortgage rate was 5.25% for 30 years at...
Arnold has two loan alternatives to finance his home mortgage. The house he is interested in is for sale for $ 180,000, but he can give a prompt payment of $ 35,000. Dollar Bank offers a loan for the balance of the debt at an effective annual interest rate of 3.0% (APY), which is based on monthly payments. The loan is expected to be repaid in 15 years. The Super Cooperative offers a 3.5% annual compound rate per month and...
Johnny Bravo has two loan alternatives to finance his home mortgage. The house that you interest is for sale for $ 180,000, but he can give a prompt payment of $ 35,000. The Little Giving Bank offers you a loan for the balance of the debt at an effective annual interest rate of 3.0% (APY). the which is based on monthly payments. The loan is expected to be repaid in 15 years. The Cooperative Super Peso offers a compound annual...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago