Contemporary Mathematics for Business and Consumers 7th Edition by Robert Brechner ,George Bergeman

Exercise 82

Calculate the housing expense ratio and the total obligations ratio for the following mortgage applications.
According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity.
Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs.
Your current mortgage payment is $1,458.50 per month, with a balance of $214,800. You have a chance to refinance at the Biltmore Bank with a 30-year, 5.5% mortgage. The closing costs of the loan are application fee, $90; credit report, $165; title insurance,.4% of the amount financed; title search, $360; and attorney's fees, $580.
You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet below to see if it makes sense to refinance your mortgage.