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  3. part2 assume that you chose the 80% ltv mortgage f

Part2 Assume that you chose the 80% LTV mortgage from the previous section, but after...

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Part2 Assume that you chose the 80% LTV mortgage from the previous section, but after 10 years are thinking about refinancing for $2,500. You will only be in the home for another 5 years. The new loan would be an ARM. Interest rates on 20 -year ARMS are currently 6%. Interest rates are expected to increase to 8% in years 2 and 3 and then to 9% in years 4 and 5. - Find the return on your $2,500 refinancing cost, Should you refinance? - If interest rates rose faster than expected, how might this change your answer? (No calculation is needed. Explain in words.) - How would larger than expected increases in interest rates impact the supply and demand for homes

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