Question

Suppose that 10 years ago you bought a home for 120000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years.
this year 10 years after you first took the loan out, you check your balance. only part of your payments have been going to pay down the loan. the rest has been going towards interest. you see that you stillhave $92678 left to pay on your loan. your house is now valued at $160000. how much of the original loan have you paid off? (i.e, how much have you reduced the loan balance by? keep in mind that interest is charged each month- its not part of the loan balance.)

Answer 1

Total interest will be  $178245.

1. Earlier we  were p[aying monthly $718.50( as per question 3 Now we are paying monthly $555.65

So we will save $162.85 ($718.50-$555.65) per month

2. Interest paid for previous loan for 10 years is $70888 Interest to be paid for next 30 years is $107357 Calculation of interest and other calculation is shown at last.

So total interest will be $70888+$107357 = $178245

3. Yes it viable to refinance it reduces interest burden and also save $162.85 everymonth. 1% difference in interest can save a lot money for us in long term and there is no extra cost for refinance hence it is really benificial.

4. Interest to be paid for the next 30 years will be $107357. You can calculate the interest as shown below as I am not able to upload the whole calculation.

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