7. You bought your house 5 years ago, and your original home value when you...
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7. You bought your house 5 years ago, and your original home value when you bought it was $450,000, you paid 20% down and you financed closing costs equal to 4% of the mortgage amount. The mortgage was a 30-year fixed rate mortgage with a 6.5% annual interest rate. Rates on 30-year mortgages are now at 5% if you pay 2 points upfront. Your refinancing costs will be 2% of the new mortgage amount (excluding points). You won't finance the points and closing costs this time. A new down payment is not required. (a) What is your refinancing amount? (b) What is the monthly mortgage payment if you refinance? The monthly saving compared to the original mortgage? (c) Compared to the original mortgage on equal footing, is this refinancing proposal a good deal
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