Davie bought his home several years ago with a 30-year fixed rate mortgage at an interest rate of 7.87%. He bought the house initially for $207,000 with a down payment of $36,000. Since he bought the house it has appreciated considerably, and is now worth $782,000. Davie is considering refinancing the house while taking out some of his home equity as cash. He is interested a 15-year fixed rate mortgage and the bank has offered him one at 3.61% interest. He will need $99,000 to pay off his initial mortgage, plus he wants to take out an additional $75,000 for himself. What will be the change in Davie's monthly mortgage payment if he chooses to refinance? Your answer can be positive or negative, and should be the New Mortgage Payment - Old Mortgage Payment. Round your answer to two decimal places.
Davie bought his home several years ago with a 30-year fixed rate mortgage at an interest rate of 7.87%. He bought the house initially for $207,000 with a down payment of $36,000. Since he bought the house it has appreciated considerably, and is now worth $782,000. Davie is considering refinancing the house while taking out some of his home equity as cash. He is interested a 15-year fixed rate mortgage and the bank has offered him one at 3.61% interest. He will need $99,000 to pay off his initial mortgage, plus he wants to take out an additional $75,000 for himself. What will be the change in Davie's monthly mortgage payment if he chooses to refinance? Your answer can be positive or negative, and should be the New Mortgage Payment - Old Mortgage Payment. Round your answer to two decimal places.
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 39P
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Transcribed Image Text:Davie bought his home several years ago with a 30-year fixed rate mortgage at an interest rate of
7.87%. He bought the house initially for $207,000 with a down payment of $36,000.
Since he bought the house it has appreciated considerably, and is now worth $782,000. Davie is
considering refinancing the house while taking out some of his home equity as cash. He is
interested a 15-year fixed rate mortgage and the bank has offered him one at 3.61% interest. He
will need $99,000 to pay off his initial mortgage, plus he wants to take out an additional $75,000
for himself.
What will be the change in Davie's monthly mortgage payment if he chooses to refinance?
Your answer can be positive or negative, and should be the New Mortgage Payment - Old Mortgage
Payment. Round your answer to two decimal places.
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