Real Estate Math
An Alaska homeowner refinances a $240,000 mortgage to a new loan at a lower rate. The refinance saves $185/month in payments. Closing costs are $5,000. The break-even period is approximately:
A15 months
B24 months
C27 months✓ Correct
D36 months
Explanation
Break-even = Closing costs ÷ Monthly savings = $5,000 ÷ $185 = 27.03 months, approximately 27 months.
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