Business, 24.06.2020 22:01, sophiav9627
Five years ago you obtained a 25-year $200,000 mortgage loan that has an interest rate of 14.5%. You can refinance the loan with a 15-year loan that has an interest rate of 12.0%. If you refinance the first loan, you will have to pay $4,000 of loan origination fees and a 2.5% prepayment penalty on the outstanding principal balance of the original loan. Assume further that you will borrow enough to pay off the remaining principal and all costs associated with refinancing.
Original Loan Info
Original Loan Amount $200,000,000
Original Interest Rate 14.5%
Original Term (years) 25
Periods 12
PMT (monthly)
NPERs already paid off
Balance outstanding after 5 years
Refinancing Load Info
Prepayment Penalty (%) 2.5%
RATE 12.0%
New Term (years) 15
Periods 12
Principal Borrowed
Loan Origination Fee $4000
Prepayment Penalty (Value)
Total Cost of loan
Required:
How much will you manage to save each month by refinancing?
Answers: 3
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Five years ago you obtained a 25-year $200,000 mortgage loan that has an interest rate of 14.5%. You...
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