Ten years ago, your parents put 20% down on a 30 year mortgage for a $350,000...

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Ten years ago, your parents put 20% down on a 30 year mortgage for a $350,000 home at 8%. Today they could refinance the mortgage for $1500. They plan to stay in the home for 5 more years and were offered a 15 year adjustable rate mortgage with a starting rate of 5%. Interest rates are expected to stay at 5% for the first three years before decreasing to 4% for years 4 and 5. Should they refinance? Ten years ago, your parents put 20% down on a 30 year mortgage for a $350,000 home at 8%. Today they could refinance the mortgage for $1500. They plan to stay in the home for 5 more years and were offered a 15 year adjustable rate mortgage with a starting rate of 5%. Interest rates are expected to stay at 5% for the first three years before decreasing to 4% for years 4 and 5. Should they refinance?

Answer rating: 100% (QA)

To determine if your parents should refinance we need to compare the total costs of their current mo... View the full answer