Posted on: 19th Aug, 2009 09:41 am
Hi,
I recently refinanced my mortgage, by consolidating my student debt at a blended rate (5.1%)
Two months later, interest rates went down and I decided to recalculate mortgage at a lower rate (for example for 3.5% rate) than the blended, and was faced with a high penalty if to break the mortgage.
my question is how do you calculate the penalty in this case to determine if worth it to break mortgage?
Thank you for your time.
I recently refinanced my mortgage, by consolidating my student debt at a blended rate (5.1%)
Two months later, interest rates went down and I decided to recalculate mortgage at a lower rate (for example for 3.5% rate) than the blended, and was faced with a high penalty if to break the mortgage.
my question is how do you calculate the penalty in this case to determine if worth it to break mortgage?
Thank you for your time.
Best option is to call your lender and they will be more than happy to tell you how much will be the penalty
Also check your loan docs
You have a few options. 1. Look thru your loan docs, if you do have a penalty it will be in there. 2. Call your current lender. 3. You can do it yourself, your Pre-Payment penalty is usually 6 months of just the interest portion of your monthly payment. Then what you want to do is see how much time is left before your penalty falls off. See how much you will pay in interest if you stay in the loan as opposed to getting out of it.
N. Peter
Voyage home loans
N. Peter
Voyage home loans