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Question: Assume a borrower made a mortgage loan five years ago for $180,000 at 8 % interest for 30 years (monthly payment). After five years, interest rates fall, and a new mortgage loan is available at 7.5 percent for 25 years. The loan balance on the existing loan is $171,125.74. Suppose the closing cost for the new loan will be $5,500 plus $150 for recording fees. Should the borrower refinance?

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