Refinance question

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Topic Author
FB01
Posts: 689
Joined: Fri May 20, 2011 12:36 am

Refinance question

Post by FB01 »

Hi all,

So i have 30 year loan for 3.25%. If I have some extra money, I try to make payment towards the principal every month. (I paid extra $300 the other day and it said i saved $450 in interest:-)

I am not sure if I will get a better rate in future for 30 year loan, but just in case if I want to refinance at a lower rate or may be move to 15 year loan (which I don't think is possible), do I need to pay extra money while doing this..like pay $20,000 and I should be able to refinance at a better rate.

The question I am asking because as I am putting my extra money every month towards principal, if the money is required in future for the above purpose, I can start saving with that intent only.

Would appreciate if anyone explain the process if they have gone through.

Thanks,
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whatusername?
Posts: 641
Joined: Wed Feb 18, 2015 5:08 pm

Re: Refinance question

Post by whatusername? »

With refinancing, you want to pay attention to the closing costs. Those are the "expenses" to refinancing, and they do not affect the rate.

The rate you pay in interest is determined primarily by your creditworthiness and the current market rate for financing. Unless you have a jumbo loan, paying down the principal to refinance shouldn't change your rate.

Good luck!
poker27
Posts: 1149
Joined: Mon Apr 01, 2013 2:48 pm

Re: Refinance question

Post by poker27 »

3,25 is very good for a 30year. I just refinanced and 30 years without any points were 3.50. You could refinance to a 15year at 2.875, but not sure if it would be worth it.
orca91
Posts: 1223
Joined: Thu Mar 03, 2016 6:17 pm

Re: Refinance question

Post by orca91 »

Stick with what you have... that's a good rate for a 30 year mortgage.

No need to save up to try and refinance. The rate isn't changed by how much you can put down or pay down.

If you could handle the higher payment of a 15 year mortgage easily, that would be a good way to lower your total interest paid. It doesn't sound like that's the case though? Keep what you have and pay extra when you can. As you see, that's another good way to lower your total interest paid.
Topic Author
FB01
Posts: 689
Joined: Fri May 20, 2011 12:36 am

Re: Refinance question

Post by FB01 »

orca91 wrote:Stick with what you have... that's a good rate for a 30 year mortgage.

No need to save up to try and refinance. The rate isn't changed by how much you can put down or pay down.

If you could handle the higher payment of a 15 year mortgage easily, that would be a good way to lower your total interest paid. It doesn't sound like that's the case though? Keep what you have and pay extra when you can. As you see, that's another good way to lower your total interest paid.
Thanks orca91..
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