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Hello, I currently have a 15 year Mortgage with a rate of 5.75%. I have 12 years left on the loan, 200K balance. I have no plans to move from the area where I live. I would like your opinion on should I refinance with the current 15 year rate of 4.25% ? Or would you keep paying the mortgage with the rate I have for 12 more years? Thanks for any advice you have! Bradshaw
No reason to rely on opinion. Input the data of the current loan and the info on the new loan and it will tell you how long until you are money ahead. In your case that is probably not long at all and if you play on staying in the home for the foreseeable future there is little reason not to get refi ASAP...
You may also want to look into a 10 year option. Will be about the same 4.25% but broker or lender should be able to pick up at least some of your closing costs so it is worth a look.
The good news is you have a 15 year mortgage with 3 years already gone. This means you are already far far ahead of most on paying interest. IMO, I don't think you are going to save enough to cover your closing costs which can be quite significant depending upon your circumstances. The problem with a lot of low rate loans is the will usually tack it back on during the closing, and if you don't pay attention it will end up costing you considerably more. Plus they are going to want you to refinance it at 15 years and while you will end up with a lower payment with these fees rolled in, you will end up paying more.
If it was me, I would simply concentrate on paying the loan off early by putting some extra on the mortgage balance each month. You will save far more interest this way, and it will be a lot less headache wise. When the mortgage is paid for, you will be very happy. If you do decide to go the refinance route, insist on a 12 year mortgage, and insist they mail or fax you a copy of the estimated closing costs in writing and go through every line item until you understand why it is there. Don't sign or give them any money until they do this. Then you will have enough knowledge to make an informed decision.
I would refinance provided you are planning on living there for at least a couple more years. We just looked into doing this and the recoup on our closing costs vs savings on our house payment was 18 months. After that we can expect to save about $3000/year on our payment alone-not including the savings on interest over time.
Hello, I currently have a 15 year Mortgage with a rate of 5.75%. I have 12 years left on the loan, 200K balance. I have no plans to move from the area where I live. I would like your opinion on should I refinance with the current 15 year rate of 4.25% ? Or would you keep paying the mortgage with the rate I have for 12 more years? Thanks for any advice you have! Bradshaw
I'd take a look at refinancing, too -- and if you decide to do it, keep paying your present mortgage amount to help pay off the loan early. You're used to paying it anyway....
OR -- take the difference between the two mortgages and sock it away into savings.
When we first married, I paid my car payment for about 6 years.... 4 to the finance company and two into my savings account. I literally wrote a check for 143 and some odd cents and took it to the bank for savings.
That changed when we bought a house and I had to refigure the finanaces....
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Thanks !!!!!
