quote:
Rates are about the highest they have been the past 5 weeks or so. 15 yr. sitting currently at 3.5% at a par rate. So you wouldn't drop it a full point more than likely, but a decent amount.

If I am at 4.25% on a 30-year, what could I realistically get if I sought after a 15-year? And what should I be looking for to equate if doing it makes financial sense?

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Posted by HYDRebs

Houston

Member since Sep 2014

1241 posts

Posted on 12/21/17 at 12:15 pm to rpg37

Short answer, it's probably not worth it for just .75% in rate.

Long answer, There are many things to look at when Refinancing to a lower rate.

-Obviously the greater reduction in rate would more than likely equal the greater savings.
-Look at the whole costs associated with the new loan. What is it going to cost you now or what are they wrapping up into the loan. ( if you really want to get complicated add in a model for time value of money as you see. )
-Look how it will affect your Tax deductions as a lower interest rate also means a lower deduction on your Tax Return (not a Tax guy so won't be able to clarify the amount of savings)
- Lastly take into effect how long you plan on having the loan. The earlier you sell the house or pay off the loan the less money you will recoup or save in refinancing from current terms.

Real Equations should be:
Current P&I over remaining term - projected P&I over 15 year term - all tax deduction differentials for remaining years of original term = your total savings if you plan on having the loan the entire 15 years (without using TVM)

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Posted by Lou

Modesto, CA

Member since Aug 2005

8285 posts

Posted on 12/21/17 at 4:55 pm to rpg37

quote:
Could I have my home appraised, again, and if it turns out where I am now is at that 78-80% threshold, would PMI go away?

No, at least my lender would not do that when I asked. And that is good, I wouldn't want them to re-appraise my house in the future then start charging PMI again if my house went down in value. You can eliminate PMI by refinancing. If you can get an equal or lower rate, and your property appraises at $158K or more, I think the numbers might work in your favor.

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