Mr. Smith bought a $ 310000 house 6 years ago. The house is now worth $ 620000 . Originally, the house was financed by paying 30% down with the rest financed through a 20-year mortgage at 5% interest. After making 72 monthly house payments,Mr. Smith is now in need of cash, and would like to refinance the house. The finance company is willing to loan 85% of the current value of the house amortized over 15 years at 3% interest.
How much cash will the owner receive after paying the balance
of the original loan?
Amount of cash obtained = $ ??
If he uses all of the available cash for something
other than investing in his home,
by how much will his monthly payment increase?
Increase in monthly payment = $ ??