Assignment
Here is your situation: You bought your home, 10 years ago. When you bought the home, you can took a 30 years fixed rate self-amortizing mortgage for $ 350,000 @ 4 5/8 %.
1. You are to obtain quotes from three different institutions on refinancing your current home mortgage. Indicate the name of each institution, the date you got the quote and the name of the person you talked to (you may use internet quote).
2. Assuming you expect to live in the house 20 more years, compare the three loans and calculate which loan is offering the lowest effective rate.
3. Assuming you expect to live in the house 10 more years, compare the three loans and calculate which loan is offering the lowest effective rate.
4. Assuming you expect to live in the house 5 more years, compare the three loans and calculate which loan is offering the lowest effective rate.
5. Assuming you expect to live in the house 20 more years, determine whether or not the loan chosen in (2) above is likely to be profitable if you refinance your current mortgage.
6. Assuming you want to continue making the same monthly payment for the same number of years (20 more), how much cash could you obtain immediately from the refinancing?
7. Assuming you take no cash up front, and expect to pay off your loan in the same number of years (20 more), how much will refinancing reduce your monthly payment?
8. Assuming you take no cash up front and want to continue making the same monthly payment, how much will the refinancing reduce the maturity (length) of your loan?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.