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GeoffT

Advice on refi

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With rates at historic lows, I know I will be refinancing my mortgage very soon. The question is for how many years.

 

I have a little over 18 years left on my mortgage. But my wife and I are expecting to sell the house within the next 5-10 years.

 

Knowing that we expect to move long before our current mortgage is paid off, which refi option should I shoot for?

 

- 30 year - savings of $420 a month

- 20 year - savings of $215 a month

- 15 year - savings of $55 a month

 

 

What do you think?

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With rates at historic lows, I know I will be refinancing my mortgage very soon. The question is for how many years.

I have a little over 18 years left on my mortgage. But my wife and I are expecting to sell the house within the next 5-10 years.

Knowing that we expect to move long before our current mortgage is paid off, which refi option should I shoot for?

- 30 year - savings of $420 a month

- 20 year - savings of $215 a month

- 15 year - savings of $55 a month

What do you think?

 

do you have kids in College or soon to be?

 

That would affect your decision...as that is part of the college equation

 

And there are the Tax implications for the write off the interest, etc.. (may not be a big deal)

 

 

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I have a couple kids in college. One is in county college so it's really cheap, no problem there. But I'm on the hock for $120K for the other one.

 

 

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Normally I'd say go the 15 years, but in this case get the 30yr and pay down the college debt asap.

 

 

I dunno...I would not want to re-fi and have the college come asking for more coin..

 

:huh:

 

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Normally I'd say go the 15 years, but in this case get the 30yr and pay down the college debt asap.

 

:huh:

 

what I was refering to, if you have some kind of student aid and your financial situation changes, they can come back. It may or may not be applicable here, I dunno.

 

 

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Off the top of my head I'm thinking it probably doesn't pay to refi.

 

How much interest are you going to pay in the 5 years on your current loan? 10 years?

 

Now do the same thing for the new refinanced loan.

 

How much interest did you save in the refi?

 

Now add in your closing costs.

 

I'm interested to see if you actually save any money. Sure, your payment might go down, but are you saving money?

 

I recently crunched the numbers on my own mortgage and it would have cost me an extra 10k to refi, even if I prepaid the new lower rate loan with the monthly savings.

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Off the top of my head I'm thinking it probably doesn't pay to refi.

How much interest are you going to pay in the 5 years on your current loan? 10 years?

Now do the same thing for the new refinanced loan.

How much interest did you save in the refi?

Now add in your closing costs.

I'm interested to see if you actually save any money. Sure, your payment might go down, but are you saving money?

I recently crunched the numbers on my own mortgage and it would have cost me an extra 10k to refi, even if I prepaid the new lower rate loan with the monthly savings.

 

Closing costs are the key - for a short term (5-10years) it usually does not make sense unless the interest rate differential is really big.

 

KoQ - how could it cost you "an extra" $10K to refi, nice house but you ain't refinancing millions - you may have flipped one too many beads on your abacus :huh:

 

 

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My mortgage holder is offering me the RUSH program: lower my rates with no closing costs. (not sure of full details)

 

I have 23 years left on a 30 year motgage, and am cosidering going in to a 20 year loan (3.85%). Still save a little each month.

 

Almost seems to good to be true.

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I dunno...I would not want to re-fi and have the college come asking for more coin..

 

Not applicable in my case. The one who sweetly left me 120K undergraduate payments to deal with is now in law school on her dime. The county college costs amount to only several thousand dollars tops.

 

 

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My mortgage holder is offering me the RUSH program: lower my rates with no closing costs. (not sure of full details)

I have 23 years left on a 30 year motgage, and am cosidering going in to a 20 year loan (3.85%). Still save a little each month.

Almost seems to good to be true.

 

I did 3 refi thru Wells fargo and it was a great deal. It took me less than 1/2 hour to refi...basically sign the book and go to Town Hall and have them notarize it .

 

Then they stopped it last year.. :(

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Off the top of my head I'm thinking it probably doesn't pay to refi.

How much interest are you going to pay in the 5 years on your current loan? 10 years?

Now do the same thing for the new refinanced loan.

How much interest did you save in the refi?

Now add in your closing costs.

I'm interested to see if you actually save any money. Sure, your payment might go down, but are you saving money?

I recently crunched the numbers on my own mortgage and it would have cost me an extra 10k to refi, even if I prepaid the new lower rate loan with the monthly savings.

 

KoQ, no closing costs in my case. My mortgage company has an '3 step" refi application existing customers can apply for on its website with all closing costs paid for by the company. Nothing out of my pocket so monthly savings are immeidate and seem real to me.

 

Current rate for 30 years is 3.85%. Sweet!

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I did 3 refi thru Wells fargo and it was a great deal. It took me less than 1/2 hour to refi...basically sign the book and go to Town Hall and have them notarize it .

Then they stopped it last year.. :(

 

My mortgage officer told me it's still going on? She's the one who encouraged me to sign up for it. The application for it is still active on the website.

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My mortgage officer told me it's still going on? She's the one who encouraged me to sign up for it. The application for it is still active on the website.

 

I shall go looking...thanks!

 

I asked about 1 month ago.

 

 

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If cash flow is an issue, saving the $420.00 per month. There is a difference between "no closing costs" and "no out of pocket costs". Your loan officer is required to give you a Good Faith Estimate and Truth in Lending Disclosure within 3 days of making application- look there for the closing costs. The spread between the interest rate and the APR on the TiL will give you an idea of what you are paying for closing costs, even if it is not out of pocket, you are financing those costs over the life of the loan.

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