Note: The information presented here applies the questions 11 and 12. You borrow

Question

1. Note: The information presented here applies the questions 11 and 12. You borrowed $350,000 using a 30-year fixed-rate mortgage with a contract rate of 6%. The loan gives you the choice between making the scheduled fully amortizing payment or a minimum payment of $1500. After this initial two-year period, the existing balance of the loan is amortized over the remaining 28 years of the loan's term. If you make the minimum payment each month for the first two years, what is your new mortgage balance after making these payments?
   

B)If you make the minimum payment each month for the first two years of the loan, what will your fixed monthly payment be for the remaining term?

TI BA II Plus Steps also if possible thanks. Note: The information presented here applies the questions 11 and 12. You borrowed $350,000 using a 30-year fixed-rate mortgage with a contract rate of 6%. The loan gives you the choice between making the scheduled fully amortizing payment or a minimum payment of $1500. After this initial two-year period, the existing balance of the loan is amortized over the remaining 28 years of the loan's term. If you make the minimum payment each month for the first two years, what is your new mortgage balance after making these payments?
Note: The information presented here applies the questions 11 and 12. You borrowed $350,000 using a 30-year fixed-rate mortgage with a contract rate of 6%. The loan gives you the choice between making the scheduled fully amortizing payment or a minimum payment of $1500. After this initial two-year period, the existing balance of the loan is amortized over the remaining 28 years of the loan's term. If you make the minimum payment each month for the first two years, what is your new mortgage balance after making these payments? B)If you make the minimum payment each month for the first two years of the loan, what will your fixed monthly payment be for the remaining term?

TI BA II Plus Steps also if possible thanks.

Explanation / Answer

Each time you refinance, you're selling and re-buying the house, which requires a loan application fee, title search ALL over again, inspection, etc and so forth, which adds a couple thousand bucks or more onto your home if you're not paying out in cash.

So, without knowing what your house is worth to calculate the monthly difference, you've already stated that the process added $350,000 onto your house that you now have to pay off over 30 years.

and the new payment at 6%, how much is saved each month and how many years does it take to add up to $12,000? That is your break-even point. Say your house is worth $1500. At 6%, your payment is $2100 /mo (no tax/ins here).

Now, you add $350,000, financing $2100 at 6% and your new payment is $1500/mo. You're saving $600 a month, but added $350,000 in debt which takes 4 years just to break even.

If you finance every year, you'll end up owing more than the house is ever worth. And a cheaper house, say at $1500K,would only magnify your problem worse.

You really don't want to refinance more than every 3 -4 years at minimum, and for a lot more than a measly 1%. It SOUNDS like you're saving money, and on monthly payments, you are, but at a tremendous long term cost to yourself. If it's a cost to YOU, then guess who's making the money? That's right, that's why they make it sound so good.

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