The remaining balance of his initial mortgage

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Da Feng is looking to refinance his home because rates have gone down since he purchased the house 5 years ago. He started with a 30-year fixed-rate mortgage of $213,000 at an annual rate of 6.70%. He has to make monthly payments. He can now get a 25-year fixed-rate mortgage at an annual rate of 4.10% on the remaining balance of his initial mortgage. This loan also requires monthly payments. In order to re-finance, Da Feng will need to pay closing costs of $2,300. These costs are out of pocket and cannot be rolled into the new mortgage. How much will refinancing save Da Feng?

Reference no: EM13726406

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