schmitz wrote:hope this is the correct sub forum...
anyways, here is the info: we currently have a ~320,000 mortgage at 3.875%. (we actually refinanced a first time back in october, 2012)
we are told we can get 30 year/3.625% when we are eligible to refinance again (no fee refinance, only pay for an appraisal which was $400 last time). we plan on staying in the house at least 5 years...id say 95% chance its over 10 years. we are 35 and 34 years old.
is it worth it? normally id say of course since its probably a saving of about $50/month for basically doing nothing (8 months would recoup the appraisal fee and everything after that is a bonus) but i always forget that it resets the mortgage to a new 30 years. now granted, we would only be 6 months since our last but does this mean we would be adding 6 more monthly payments in exchange for saving ~$50 per month?
doesnt seem so great when I look at it like that. or is my math waaaay wrong?
i always forget that it resets the mortgage to a new 30 years. now granted, we would only be 6 months since our last but does this mean we would be adding 6 more monthly payments in exchange for saving ~$50 per month?tj wrote:schmitz wrote:hope this is the correct sub forum...
anyways, here is the info: we currently have a ~320,000 mortgage at 3.875%. (we actually refinanced a first time back in october, 2012)
we are told we can get 30 year/3.625% when we are eligible to refinance again (no fee refinance, only pay for an appraisal which was $400 last time). we plan on staying in the house at least 5 years...id say 95% chance its over 10 years. we are 35 and 34 years old.
is it worth it? normally id say of course since its probably a saving of about $50/month for basically doing nothing (8 months would recoup the appraisal fee and everything after that is a bonus) but i always forget that it resets the mortgage to a new 30 years. now granted, we would only be 6 months since our last but does this mean we would be adding 6 more monthly payments in exchange for saving ~$50 per month?
doesnt seem so great when I look at it like that. or is my math waaaay wrong?
Yes if you refi to a new loan, you would have 30 full years of payments. Of course, you could just pay it off 6 months early if that bothers you.
Outer Marker wrote:Yes, you should refi as rates are lower now, and you can do so at little or no cost. However, assuming you have good credit and a conforming loan, you should be able to do better than that not-so-wonderful offer from your current bank. Try amerisave.com, national mortgage alliance, and other internet direct lenders. Looks like you could walk away from the table with a 3.5% rate with all costs covered.
schmitz wrote:so (if my math is right) i am paying an extra $700 per month for 15 years less and should save $147,000 in interest over the loan.
schmitz wrote:the is now offering a 15 year at 2.875%.
so right now im at 30 year/3.875% - . . . . i guess the big question is can I afford $700 extra per month because refinancing adds risk. i can always stop adding $700 if i keep my current loan but if i refinance to the 15 year i have to pay it. right now we could afford $700 per month...in 5 years? in 10 years? who knows?
VgSince1982 wrote:I like to look at the math a little more simply. It provides a better starting point than computing years and years worth of payments.
Start with the principal and interest (P+I) portion of your payment:
Your mortgage company computes your current month's interest by multiplying your monthly rate (yearly divided by 12) and your loan balance. That's it. Anything else in your P+I payment is principal and you are paying yourself back.
Right now, at $320,000 and 3.875%, this month's interest owed is $1033. (320000 times .03875 divided by 12)
If you changed to 3.625%, this month's interest owed is $967. (320000 times .03625 divided by 12)
If you changed ot 2.875%, this month's interest owed is $767. (320000 times .02875 divided by 12)
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