What are the primary considerations that should be made when refinancing? What factors must be considered when deciding whether to refinance a loan after interest rates have declined? (10 points) As an investor, you obtained a fully amortizing mortgage five years ago for $95,000 at 11 percent for 30 years. Mortgage rates have dropped so that the fully amortizing 25-year loan can be obtained for 10 percent. There is no prepayment penalty on the mortgage balance of the original loan, but 3 points will be charged on the new loan and other closing costs will be $2,000. All payments are monthly. a. Should the borrower refinance if he plans to own the property for the remaining loan term? Explain your answer. (20 points) b. Would you answer to (a) change if he planned to own the property for only five more years? Explain your answer. (20 points) What are the primary considerations that should be made when refinancing? What factors must be considered when deciding whether to refinance a loan after interest rates have declined? (10 points) As an investor, you obtained a fully amortizing mortgage five years ago for $95,000 at 11 percent for 30 years. Mortgage rates have dropped so that the fully amortizing 25-year loan can be obtained for 10 percent. There is no prepayment penalty on the mortgage balance of the original loan, but 3 points will be charged on the new loan and other closing costs will be $2,000. All payments are monthly. a. Should the borrower refinance if he plans to own the property for the remaining loan term? Explain your answer. (20 points) b. Would you answer to (a) change if he planned to own the property for only five more years? Explain your answer. (20 points)