Smith Development Co. contracted a 30-year FRM loan with monthly amortization of $1.7 million at an interest
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- Smith Development Co. contracted a 30-year FRM loan with monthly amortization of $1.7 million at an interest rate of 15.2% five years ago. John Smith, a partner, just talked to a loan officer and learned that he can refinance the current balance on the loan at interest rate of 13% for a FRM amortized over 25 years. However, he also estimated the total refinancing cost to be $70,000. If Smith Development Co. holds the mortgage debt for 25 more years, would you recommend them to refinance? What if it holds for three years?
Related Book For
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
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