Assume that you chose the 80% LTV mortgage  but after 10 years are thinking about refinancing for $5,000. You will only be in the home for another 5 years. The new loan would be an ARM. Interest rates on 20-year ARMS are currently 6%. Interest rates are expected to increase to 7% in years 2 and 3 and then to 8% in years 4 and 5. 

Find the return on your $5,000 refinancing cost. 

Should you refinance?

Answer rating: 100% (QA)

Solution To calculate the return on your 5000 refinancing cost we need to calculate the total cost of refinancing including the interest rate and the ... View the full answer