10 year mortgage

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sterlingcooper05
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10 year mortgage

Post by sterlingcooper05 »

I'm about 4 years into a 15 year mortgage @ 3.375% with a balance of $224K. I was quoted at 2.375% on a 10 year mortgage. I'll have to pay some fees to close to the tune of $1200. In a little over 6 months, I'll break even on the closing costs. Is this a no brainer to eliminate a year off my mortgage while saving 1% interest?
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abuss368
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Re: 10 year mortgage

Post by abuss368 »

Sounds reasonable.
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batpot
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Re: 10 year mortgage

Post by batpot »

If there's no rate break over a 15 year (there rarely is), then there's no point.
refi to a 15 year, and pay extra every month to get it paid off in 10.
might also reduce the up front closing costs.

Google "amortization with extra principal payments"
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willthrill81
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Re: 10 year mortgage

Post by willthrill81 »

I agree with batpot that you should also get rates for a 15 year mortgage to compare them. I really doubt that there will be any difference at all. In fact, I've seen 15 year mortgages at 2.25%. If the 10 year rate isn't lower than the 15 year rate, then get a 15 year mortgage and pay it off in 10 years if you want to. The advantage of this is that you would retain, at no additional cost, the flexibility of making the smaller 15 year payment if needed at some point rather than be forced to make the higher 10 year payment.
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jerrysmith
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Re: 10 year mortgage

Post by jerrysmith »

Sounds good to me. I refi'd into a 10 from a 15 a couple months ago.
Hyperchicken
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Re: 10 year mortgage

Post by Hyperchicken »

Okay not to rub it in, but I second what batpot and willthrill81 said - and in my experience too, 10 year mortgages are rarely quoted with any better interest rate than 15 year ones.

Other than that, a good deal overall, ~0.5% closing costs are very reasonable.
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