To Refinance or Not

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KBREAMK
Posts: 63
Joined: Thu Mar 14, 2019 6:25 pm

To Refinance or Not

Post by KBREAMK » Wed Jun 12, 2019 9:10 am

We are currently 4 years into a 30 year fixed mortgage with a fixed interest rate of 4.25%. Earlier this year we took out a HELOC of $20,600 that is currently at a variable rate of 2.99%. Our current mortgage payment is $2,404 (includes taxes and insurance) and we pay $400 towards the HELOC each month for a total of $2,804 each month.

To see my other financial history please see this post: viewtopic.php?f=1&t=283106

I called Quicken Loans in order to see what sort of refinance options I have. I want to roll the HELOC and my mortgage into one loan. They presented these two options.

1. 30 Year Fixed at 4.25%. The monthly payment would work out to be $2,473 (includes taxes and insurance).

2. 20 Year Fixed at 3.99%. The monthly payment would work out to be $2,853 (includes taxes and insurance).

The interest savings for the 20 year option compared to the 30 year option work out to be approximately $106,000. As such, option 2 seems to be the obvious choice.

Am I missing something? Thanks in advance for your help and advice.
Last edited by KBREAMK on Wed Jun 12, 2019 9:30 am, edited 1 time in total.

Golf maniac
Posts: 251
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: To Refinance or Not

Post by Golf maniac » Wed Jun 12, 2019 9:25 am

I would shop more. Look at aim loan and bankrate.com. I am assuming your rolling the HELOC into the new mortgage. Nothing looks wrong with your assumptions and the 20 year fixed is always better. You may be able to find a lower rate 15 year that you can handle, that would be even better. Are you rolling closing costs into the new loan balance? Always compare closing costs between lenders. Aim loan has a good process to show you estimated closing costs and what you need to bring to the table at closing.

Topic Author
KBREAMK
Posts: 63
Joined: Thu Mar 14, 2019 6:25 pm

Re: To Refinance or Not

Post by KBREAMK » Wed Jun 12, 2019 9:30 am

Golf maniac wrote:
Wed Jun 12, 2019 9:25 am
I would shop more. Look at aim loan and bankrate.com. I am assuming your rolling the HELOC into the new mortgage. Nothing looks wrong with your assumptions and the 20 year fixed is always better. You may be able to find a lower rate 15 year that you can handle, that would be even better. Are you rolling closing costs into the new loan balance? Always compare closing costs between lenders. Aim loan has a good process to show you estimated closing costs and what you need to bring to the table at closing.
Thanks. Yes, I am rolling the HELOC into the new loan. I will update the original post to make that more clear. I will also call on Aim loan.

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