Over the 6 years since you took out the loan, mortgage rates have dropped. You can now get a mortgage at 9.05%, which will result in a new monthly payment
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Your old $47,000, 30-year, 12.8% mortgage has a monthly payment of $512.58.
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of $369.36. To refinance, you must pay $1,020 in closing costs and a $480
prepayment penalty. ONE2 .S
24. Find the net amount you will save in the first year.
25. Find the net amount you will save in the second year.
26. After being in effect for 4 years, the rate of interest on Syd Mutin's variable rate
mortgage increased to 6.48% from 4.7%. Syd's old monthly payment was
$259.32. His new monthly payment is $327.18. How much more will Syd pay
in one year at the new mortgage rate?
27. CRITICAL THINKING What do you think are the advantages and
disadvantages of low down payments and long-term loans?
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28. CRITICAL THINKING When do you think that refinancing a mortgage may
not be a good idea?