Question: Eric Mathis is considering refinancing his home mortgage to reduce his house payment by $75 per month. Closing costs associated with the refinancing will total

Eric Mathis is considering refinancing his home mortgage to reduce his house payment by $75 per month. Closing costs associated with the refinancing will total $3,750. Eric will finish graduate school in three years, at which time he will sell the house and move to another state.

Required

a. What is the payback period for refinancing this loan?

b. Given Eric's plans, should he refinance his mortgage at this time? Why or why not?

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