Real Estate Math

A Nebraska homeowner wants to refinance their $195,000 balance at a lower rate. The new lender charges $3,200 in closing costs. If the monthly payment savings are $85, the break-even point is approximately:

A37.6 months✓ Correct
B30 months
C42 months
D24 months

Explanation

Break-even = Closing costs ÷ Monthly savings = $3,200 ÷ $85 = 37.6 months.

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