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CantSpelGood
Houston Astros Fan
LA
Member since Aug 2019
56 posts

Refi or pay more monthly
Can someone explain this to me, I’ve been looking at mortgage rates. I have 25 years left on mortgage. If a 20year refi note would raise my payment an extra $100/month, I presume it would be better to keep my current note.

And then proceed to just pay an extra 100/month on current note instead of going to the 20 year with even if the interest rate is lower.


damnlambert
New Orleans Saints Fan
Louisiana
Member since Oct 2019
37 posts

re: Refi or pay more monthly
did you factor in closing cost also?


AUHighPlainsDrifter
Auburn Fan
South Carolina
Member since Sep 2017
361 posts

re: Refi or pay more monthly
You need to pull up a couple of amortization charts and compare the two scenarios (and yes, be sure to include closing costs for the 20 year loan). Just google "extra payment amortization table" and you should be able to find what you need to make a good decision.


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meansonny
Georgia Fan
ATL
Member since Sep 2012
12894 posts

re: Refi or pay more monthly
3 easy questions:

What is your current interest rate and balance?

What would the new interest rate and loan amount be?

How long do you plan on being in the home?

If you are planning on staying in the home 2+ years, you are usually better off refinancing at today's rates.


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CantSpelGood
Houston Astros Fan
LA
Member since Aug 2019
56 posts

re: Refi or pay more monthly
I’m aware of them which I was I am hesitant to go forward with a refi.


meansonny
Georgia Fan
ATL
Member since Sep 2012
12894 posts

re: Refi or pay more monthly
How long are you going to be in the home?

If you are expecting to payoff in 15 to 20 years, why wouldn't you take the lower rate?


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RedlandsTiger
LSU Fan
Redlands, CA
Member since Jan 2008
2561 posts

re: Refi or pay more monthly
quote:

You need to pull up a couple of amortization charts and compare the two scenarios (and yes, be sure to include closing costs for the 20 year loan). Just google "extra payment amortization table" and you should be able to find what you need to make a good decision.


This


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Fat Bastard
Atlanta Braves Fan
Member since Mar 2009
50443 posts

re: Refi or pay more monthly
if you want to pay more that is fine but do it with a HELOC or a PLOC using velocity banking guidelines. protects you when life happens and gives you liquidity which you do not have with extra principal once paid to mortgage company.


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