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Refinance?

james 14james 14 Posts: 3,084 Moderator
Currently in a 15/25 loan with 12 years to go at 4.9% (have to pay off or refi at 15 years...amortized over 25 years). Can refi for 20 years fixed at 3.(forgot the exact percentage) and lower my payment $50 a month. This is even with adding the closing cost to the principle. Yes I'm paying about 4k for the process but if the overall payment is lower it should be worth it. Is this sound judgement or am I missing something?

Replies

  • Joey ButtonsJoey Buttons Posts: 11,849 AG
    Jump in head first. Sounds like a good deal to me.
  • Mister-JrMister-Jr Posts: 27,763 AG
    james 14 wrote: »
    Currently in a 15/25 loan with 12 years to go at 4.9% (have to pay off or refi at 15 years...amortized over 25 years). Can refi for 20 years fixed at 3.(forgot the exact percentage) and lower my payment $50 a month. This is even with adding the closing cost to the principle. Yes I'm paying about 4k for the process but if the overall payment is lower it should be worth it. Is this sound judgement or am I missing something?

    Refi now for 15 fixed @3.8 or 3.9, it's a great deal to help eliminate debt will you can.
    Vote for the other candidate
  • fishknutfishknut Posts: 3,928 Captain
    Do it, I doubt rates will be this low in twelve years when you are forced to make a decision, make a decision when it best suits you. We just refinanced last year for ten years @ 4%, I want this thing paid for. Good luck.
    Fail to plan, plan to fail.......
  • reelpleasurereelpleasure Posts: 754 Officer
    Is the 4.9% fixed ? If it is a standard mortgage with no pre payment penalty, you could sent an extra $ 50.00 to $ 100.00 per Month, if it is going to the principle. You would then have it paid off in 12 Years instead of 20, and not have to pay the $ 4,000.00 in closing costs.

    You can look on your amortization schedule, and figure how much you would need to send to pay it off in 12 Years.
  • td.td. Posts: 4,695 Captain
    Mister-Jr wrote: »
    Refi now for 15 fixed @3.8 or 3.9, it's a great deal to help eliminate debt will you can.

    Why so high, you can get 30 yr fixed at those rates? You want a 15, you should be around 3.25 currently.
  • james 14james 14 Posts: 3,084 Moderator
    td. wrote: »
    Why so high, you can get 30 yr fixed at those rates? You want a 15, you should be around 3.25 currently.

    I can get a 15 fixed for 3.25. The 20 is 3.75. The 15 would increase my payments by 50 a month but pay it off 5 years sooner.

    It would take $230 a month extra to pay off my current mortgage in 12 years. When I bought the house I heard the same thing - "Rates will never be this low again". Then they tanked even further so I modified after 4 months of owning it (started with a 5/1 ARM with intentions to refi) and dropped my payment while locking into a fixed rate for 15 years. After running about 20 different payment scenarios this is what made the most sense at the time. Now they've dropped even further and its looking like I might be refinancing sooner than I thought.
  • Reel UmReel Um Posts: 260 Officer
    Check with quicken loans. NO closing cost. Dont know how numbers would work out if your is lower rate plus closing or no closing but a tad higher rate.

    All of these low rate numbers are they from bankers in the business? or what you hear?? Buying points up front??
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