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A Borrower Made a Mortgage Loan 7 Years Ago for $160,000

Question 1

Multiple Choice

A borrower made a mortgage loan 7 years ago for $160,000 at 10.25% interest for 30 years.The loan balance is now $151,806.62 and rates for this amount are currently 9.0% for 23 years.Origination fees and closing costs are $4,500 and closing costs are not financed by the lender.What is the effective cost of refinancing?


A) 9.0%
B) 10.85%
C) 15.32%
D) 9.39%

Correct Answer:

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