What is the outstanding balance on your mortgage

Assignment Help Accounting Basics

Reference no: EM132840811

Question -

Q1) You have decided to buy a house and finance it with a 15-year, 4.50% APR mortgage. The house costs $600,000 and the bank requires a 20% down payment. All mortgage payments are made monthly at the beginning of the month. Show your work. Complete the amortization schedule below for the first three months of the mortgage.

Q2) During the last three months interest rates have fallen, and you would like to take advantage of the lower rates that currently exist by refinancing. Refinancing means you pay off the outstanding principal balance on your current mortgage with a new loan at the lower rates that currently exist.

a) What is the outstanding balance on your mortgage after three months?

b) If rates have fallen to 2.75%, how much would you save monthly if you refinance at the end of the second month? (assume you take out a new 15-year loan). Show your calculations.

Reference no: EM132840811

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