Question;Assume that your neighbor took a loan of $300,000 four years ago. At that time, she took a 30-year loan for 5.8%. She now wants to consider re-financing her loan. She went to a bank and was told that re-financing her loan for 30 years would cost her $6,500 upfront and re-financing her loan for 15 years would cost her $5,000 upfront. Your neighbor is low on cash and would prefer to add the upfront fees into her new loan.Your neighbor comes to seek your help with her mortgage dilemma.Can you use your Time Value of Money skills to help guide your neighbor if she should go for re-financing? You can guide her in terms of helping her understand her current interest expense versus future interest expense, current PMT versus future PMT, how a 15-year loan versus a 30-year loan would affect her finances, etc. Help her understand by giving her different scenarios so she can make a good decision that suits her best. You can get the current rates from any bank website by searching under Mortgage Rates.Provide your work using tables/graphs/explanations. Also, attach a PDF of the website you used to obtain the mortgage rates.
Paper#49913 | Written in 18-Jul-2015Price : $27