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Should I refinance my home?
Posted on 11/8/17 at 6:10 am
Posted on 11/8/17 at 6:10 am
I sought out refinancing options and this is what I've been offered:
Same interest rate, add about $85 a month to the note, but take about 8 years off the life of my mortgage (currently on year 2 of 30. Would refinance down to a 20 year fixed loan).
On the surface it makes sense being it looks like I'd save about 60,000 over the the course of 20 years and will be done 8 years sooner than before.
Any tips, advice, or things to beware of here?
Same interest rate, add about $85 a month to the note, but take about 8 years off the life of my mortgage (currently on year 2 of 30. Would refinance down to a 20 year fixed loan).
On the surface it makes sense being it looks like I'd save about 60,000 over the the course of 20 years and will be done 8 years sooner than before.
Any tips, advice, or things to beware of here?
3
Posted on 11/8/17 at 6:32 am to FaithInFarmer
do you plan to pay the closing cost up front or roll it back into the loan? If rolling it back in why not just pay the extra $85 a month or more and don't have to refinance? Download a amortization schedule and play around with the numbers.
Posted on 11/8/17 at 6:36 am to FaithInFarmer
If you're two years in, I'm guessing you have a great rate already. Just pay extra on it and you will get to the same place, plus give yourself some cushion if your situation changes and you can't afford the higher payment anymore.
Posted on 11/8/17 at 6:40 am to FaithInFarmer
Unless you have an early payoff penalty, I wouldn’t refinance at the same rates. Just pay extra towards the principal each month on your current mortgage. I don’t see any advantage to refinancing at same rates, but shorter term.
Posted on 11/8/17 at 11:07 am to TigerFanatic1
If you are going to get the same interest rate there is no benefit to refinance over just paying the extra every month to the principal. Unless you didnt put 20% down and you have somehow gained equity (upgrades or market conditions) in the home and a refi will put you below 80% loan to value thus dropping off PMI.
Just my opinion but other than forcing you to pay the extra money every month there isn't much benefit to a 20 year vs the 30 year because there is no real break in the interest rate. Keep the 30 and pay extra and don't waste money on the closing cost.
The saving come when you refi with a 15 yr mortgage as they interest rate is usually a half point to a point better.
Just my opinion but other than forcing you to pay the extra money every month there isn't much benefit to a 20 year vs the 30 year because there is no real break in the interest rate. Keep the 30 and pay extra and don't waste money on the closing cost.
The saving come when you refi with a 15 yr mortgage as they interest rate is usually a half point to a point better.
This post was edited on 11/8/17 at 11:09 am
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