Based on the scenario given , we can see that because the couple have already filed for bankruptcy, there is a 12% fixed rate for a 30 year mortgage, therefore, if they got 8% loan rate and the loan amount is $140, 000, then the amount which they would be paying more would be $412.79.
As a result of this, we can see that their extra amount which they would pay is to first calculate the total loan tenure which is 30 x 12 = 360 months.
Next would be to find the new monthly payments from the better credit rating and it would be $1,027.27
Next, we would factor in the bankruptcy factor which would be 0.01.
Next, we would calculate the monthly payments would be $1,440.06
Finally, we would find the difference between the excess payment which would be $1,440.06 - $1,027.27
Therefore, the correct answer is $412.79
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