Posted on: 13th Jan, 2011 05:14 am
we presenty owe 102k on a 30 yr note that we are five years into. my interest is 5.75%, my monthly payment is 702 and i always send an extra $200 towards the principal.
if i refinance to a 15 yr note, interest will be 3.75 with a payment of 803 (approx), no points but just over 4k in closing costs.
should i refi? we will most likely be in this house another 5-10 years. i never have a problem sending in the extra $200 and could probably send more.
thanks, in advance, for any information!
if i refinance to a 15 yr note, interest will be 3.75 with a payment of 803 (approx), no points but just over 4k in closing costs.
should i refi? we will most likely be in this house another 5-10 years. i never have a problem sending in the extra $200 and could probably send more.
thanks, in advance, for any information!
Welcome Guest,
As you will be staying the property for the next 5-10 years and as you can afford the payments, it will be a good option to refinance the loan.
As you will be staying the property for the next 5-10 years and as you can afford the payments, it will be a good option to refinance the loan.
Bankrate.com has a nifty refinance calculator at:
http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx.
I put your info into there and it says your payment should be $742/mth, not $803 (I double checked with my loan origination software and got the same thing). The calculator also tells you how long it will take to make back your closing costs... 100 months, or about 8 years.
If you're pretty sure about the 5-10 years, you would be better off with a higher rate and lower fees. For example, my current 3.75% rate has $2600 in fees compared to the 4.25% rate with $309. The 4.25% payment is $767, or $25 more a month.
Plugging my (lower) fees into the Bankrate calculator, 3.75% pays back in 65 months and 4.25% pays back in 5.
If you take the difference in fees and divide by the difference in monthly payments, you get ($2600-$309)/($767-$742) = 92 months. That's how long it would be before you would be better off on the 3.75% rate vs the 4.25% rate.
Hope that makes sense.
--steve
Titan Mortgage Alaska
http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx.
I put your info into there and it says your payment should be $742/mth, not $803 (I double checked with my loan origination software and got the same thing). The calculator also tells you how long it will take to make back your closing costs... 100 months, or about 8 years.
If you're pretty sure about the 5-10 years, you would be better off with a higher rate and lower fees. For example, my current 3.75% rate has $2600 in fees compared to the 4.25% rate with $309. The 4.25% payment is $767, or $25 more a month.
Plugging my (lower) fees into the Bankrate calculator, 3.75% pays back in 65 months and 4.25% pays back in 5.
If you take the difference in fees and divide by the difference in monthly payments, you get ($2600-$309)/($767-$742) = 92 months. That's how long it would be before you would be better off on the 3.75% rate vs the 4.25% rate.
Hope that makes sense.
--steve
Titan Mortgage Alaska