Real Estate Math
A Connecticut homeowner refinances their $380,000 mortgage from 7.5% to 6.5%. The monthly payment at 7.5% is $2,660 and at 6.5% it would be $2,403 (30-year term). The closing costs for the refinance are $7,500. How many months to break even?
A29 months✓ Correct
B35 months
C22 months
D42 months
Explanation
Monthly savings = $2,660 - $2,403 = $257. Months to break even = $7,500 ÷ $257 ≈ 29.2 months. To solve this, multiply the relevant values: $380,000 and $2,660 at 7.5%.. The correct answer is 29 months.. This is a common calculation on the Connecticut real estate exam.
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