What is meant by prepayments due to rate/term refinancing?
What will be an ideal response?
Rate/term refinancing means that the borrower has obtained a new mortgage on the existing property to save either on interest cost or shortening the life of the mortgage with no increase in the monthly payment. The homeowner's incentive to refinance is based on the projected present value of the dollar interest savings from the lower mortgage rate after deducting the estimated transaction costs to refinance.
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Attracting a new customer costs far more than retaining an existing one
Indicate whether the statement is true or false
Firms and industries characterized by heavy fixed capacity costs and lengthy periods required to add new capacity operate under a ___________________________________
Fill in the blank(s) with correct word
The Designer Company issued 10-year bonds on January 1, 2009. The 6% bonds have a face value of $800,000 and pay interest every January 1 and July 1. The bonds were sold for $690,960 based on the market interest rate of 8%. Designer uses the effective-interest method to amortize bond discounts and premiums. On July 1, 2009, Designer should record interest expense (round to the nearest dollar) of
A) $27,638 B) $24,000 C) $48,000 D) $55,277
Which of the following statements is true of the Great Recession?
a. It was the largest economic downturn since the Great Depression. b. Its impact was limited to the United States. c. It began in 1993. d. The economy recovered from the Great Recession in 2007.