You took out a loan 10 years ago that had the following terms. Amount $1,200,000, rate 5.5%
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Question:
You took out a loan 10 years ago that had the following terms. Amount $1,200,000, rate 5.5% and 30 year amortization. You are looking to refinance the existing balance. What is your rate of return on cost if your refinance fees equal 5% of the refinance amount, the new rate is 3.5% with 240 months and you anticipate that you will only be in the house for the next five years.
What is your effective cost of borrowing?
Expert Answer:
The original amount of the loan was 120000000 and was granted to the borrower 10 years ... View the full answer
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