You have had a 30yr fa frm at 10 for 5 years the original, Ask an Expert

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You have had a 30yr FA FRM at 10% for 5 years. The original principal was 1,000,000. You are considering a cash-out refi into a 15-year mortgage at 7.5%. The old mortgage has a prepay penalty of 3% if payoff occurs before year 8. The new mortgage has fees of 4%, and no prepay penalty. The additional cash is for a $60,000 car, and can be borrowed at 9% over 10 years, with upfront fees of 1%.

Assume all fees will be financed, and that under either scenario you will be moving 10 years from now. What is the NPV of refinancing?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92075709

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