Finance Project , Finance Basics

Five years ago, you bought a house for $151,000, with a down payment of $30,000, which meant you took out a loan for $121,000. Your interest rate was 5.75% fixed. You would like to pay more on your loan. You check your bank statement and find the following information:
Escrow payment $211.13
Principle and Interest payment $706.12
Total Payment $917.25
Current Loan Balance $112,242.47
1.Explain how much additional money you would need to add to your monthly payment to pay off your loan in 20 years instead of 25.
2.Explain whether or not it would be reasonable to do this is if you currently meet your monthly expenses with less than $100 left over.
3.It might be possible to pay the current balance off in 20 years if you refinanced the loan at a lower interest rate. The interest rate that you qualify for will depend, in part, on your credit rating. Identify the highest interest rate you could refinance at in order to do this and determine the interest rate that would require a monthly total payment that is less than your current total payment. Also, refinancing costs you $2000 up-front in closing costs.
4.Explain whether it is more or less reasonable to consider refinancing your loan. In order to answer this, you need to look at different interest rates. Know that if you refinance, your minimum monthly payments will be based on a 30-year loan (though you still want to be done in 20 years). Also, refinancing costs you a couple of thousand dollars up front in closing costs.

Posted Date: 11/18/2012 2:43:56 PM | Location : United States







Related Discussions:- Finance Project , Assignment Help, Ask Question on Finance Project , Get Answer, Expert's Help, Finance Project Discussions

Write discussion on Finance Project
Your posts are moderated
Related Questions
Imagine Joy is the project coordinator in a company where four projects are running concurrently. He's employed you as the senior business analyst to perform some financial calcula

How would you explain the value of financial planning to friends or family? Which topics will you discuss with children in your life? Which topics do you feel are most imp


Rights of Ordinary Shareholders A. Right to vote Choose BOD Purchase/Sales of assets B. Influence decisions as: Right to residual ass

DEFINE THE TERM OPTION IN DETAIL?

Advantages of Central Depository System or CDS 1. It shortens the registration procedure in the stock exchange that is high speed of registering shareholders. 2. It improve

The operating income of H Ltd amounts to Rs. 186000. It pays 35% tax on its income. Its capital structure consists of the following: 14% Debentures

How to calculate the present value of assignment??

what are the qualitative factors to be considered when deciding on product mix

Benefits of Payback Period 1. use simply and understand and it has created it popular among in ascertaining the viability of venture executives, mainly traditional financial m