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Message
Home Refinance......WWYD
Posted on 8/17/15 at 2:54 pm
Posted on 8/17/15 at 2:54 pm
I am going to refinance my house. Mainly my starting goal was to lower my interest rate which obviously makes my monthly payment go down. Now I am kind of reconsidering what my goal is. I contacted 2 banks so far, and to be honest these 15 yr mortgage loans don't look that bad. The two estimates for 15 yr loans have only increased our mortgage by $80-90 dollars which isn't too much imo. The only drawback is the monthly payment, when compared to the $200 a month reduction with a traditional 30 yr loan.
What would you do? Obviously besides being the typical TD.com tycoon and paying cash for everything you own.
What would you do? Obviously besides being the typical TD.com tycoon and paying cash for everything you own.
4
Posted on 8/17/15 at 3:02 pm to Kracka
how long is left on your 30 year?
I refied to another 30 year, after owning a house for 5 years. I really wish I had also looked into the 15 year mortgage, but I really dont think I'll own that property for the long haul.
If you think you will own the property after you move out as an investment income, I would refinance to a 15 year. I'm sure someone who is much more knowledgeable in this area will come along and give you better advice though.
I refied to another 30 year, after owning a house for 5 years. I really wish I had also looked into the 15 year mortgage, but I really dont think I'll own that property for the long haul.
If you think you will own the property after you move out as an investment income, I would refinance to a 15 year. I'm sure someone who is much more knowledgeable in this area will come along and give you better advice though.
This post was edited on 8/17/15 at 3:03 pm
Posted on 8/17/15 at 3:05 pm to Kracka
Irecently refi'd to a 15 year loan. The nice thing about them is they should get you an even lower rate than the 30 year loans. If you cannot get a lower rate, you can always overpay your mortgage and put the extra toward principal and basically turn your 30 year into a 15 year, but I was able to get a significantly lower rate with the 15 year.
Posted on 8/17/15 at 3:06 pm to TigerRob20
quote:
how long is left on your 30 year?
23yrs are left.
quote:
If you think you will own the property after you move out as an investment income,
No I intend to sell it.
I don't know how much longer we will live there, but we aren't exactly putting it on the market next week. I would say we won't be there another 5 years, but unless something bigger and better comes up, I am not moving.
Posted on 8/17/15 at 3:18 pm to Kracka
I certainly don't pay cash for everything...you need to dig into the numbers on each loan in order to compare them. Stop looking at the monthly payments---look at how much each loan will cost: closing estimates, origination fees, appraisal costs, etc. Then look at the amount of interest you're paying on a 15 vs. a 30...to figure this out, look at a full amortization schedule for each loan (bankrate.com has decent loan calculators).
What is your current interest rate? What is the new interest rate for the refinanced loans (15 and 30)? Without actual numbers, it's hard to say which is a better deal. Speaking in very general terms, it usually takes at least a 1.5%--2% interest rate reduction to make it worth your while to refinance into another 30 year loan. And remember you're extending your payment period by taking on additional years (you've already paid a couple on your current 30 year mortgage).
Remember, if you keep your current loan, you don't spend ANY money on closing costs, appraisal, origination, etc. If you simply added $80-$90/month to your existing loan, you would save by paying it off early. You could take the $3K you'd spend in refinancing and put it toward the principal of your existing loan: this will lead to an earlier payoff & thus savings in interest.
What is your current interest rate? What is the new interest rate for the refinanced loans (15 and 30)? Without actual numbers, it's hard to say which is a better deal. Speaking in very general terms, it usually takes at least a 1.5%--2% interest rate reduction to make it worth your while to refinance into another 30 year loan. And remember you're extending your payment period by taking on additional years (you've already paid a couple on your current 30 year mortgage).
Remember, if you keep your current loan, you don't spend ANY money on closing costs, appraisal, origination, etc. If you simply added $80-$90/month to your existing loan, you would save by paying it off early. You could take the $3K you'd spend in refinancing and put it toward the principal of your existing loan: this will lead to an earlier payoff & thus savings in interest.
Posted on 8/17/15 at 8:12 pm to hungryone
Why do people look at 15 year amortizations? OP - a mortgage can be paid off early, just like any other loan. Why not run an amortization schedule to see how much the refi to the lower rate would pay off if you paid the 15 year amortization option's note amount?
You still save thousands in interest, but if anything happens (job loss, child, catastrophic economic emergency) then you aren't locked into the 15 year amortization note. You can back it down anytime you like or need.
It really makes zero sense to use a 180 month term. At all.
You still save thousands in interest, but if anything happens (job loss, child, catastrophic economic emergency) then you aren't locked into the 15 year amortization note. You can back it down anytime you like or need.
It really makes zero sense to use a 180 month term. At all.
Posted on 8/18/15 at 7:40 am to Kracka
My personal philosophy is go with 30 year loan but pay extra as if you were paying for a 15 year loan. If something ever happens, you have the freedom to cutback on the mortgage payment to free up budget.
also, if you won't be there more than 5 years, only do a true "no cost" refinance. You wont' get quite as good of a rate but you'll never recoup closing costs if you move within 5 years.
also, if you won't be there more than 5 years, only do a true "no cost" refinance. You wont' get quite as good of a rate but you'll never recoup closing costs if you move within 5 years.
This post was edited on 8/18/15 at 7:42 am
Posted on 8/18/15 at 9:33 am to notsince98
quote:
notsince98
quote:
My personal philosophy is go with 30 year loan but pay extra as if you were paying for a 15 year loan. If something ever happens, you have the freedom to cutback on the mortgage payment to free up budget. also, if you won't be there more than 5 years, only do a true "no cost" refinance. You wont' get quite as good of a rate but you'll never recoup closing costs if you move within 5 years.
This times Infinity. Also, look at the cost of refinancing. Every single dime of that is additional cost that's spread out over the new term regardless of the amortization.
Running the 15 year am schedule and then just going with the 30 year reduces your payment in case something terrible happens and you still have the flexibility to pay additional in order to pay it off more quickly.
Great advice.
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