Real Estate Principles 3rd Edition by David Ling,Wayne Archer

Exercise 14

Suppose a homeowner has an existing mortgage loan with these terms: Remaining balance of $50,000, interest rate of 8 percent, and remaining term of 10 years (monthly payments). This loan can be replaced by a loan at an interest rate of 6 percent, at a cost of 8 percent of the outstanding loan amount. Should the homeowner refinance What difference would it make if the homeowner expects to be in the home for only five more years