Posted on: 23rd Apr, 2011 08:31 am
I have a 30 years fixed loan and I have already paid 7 years. I am thinking of refinancing to 30 years for 4.5. The closing cost will be $2,500. Please advise.
Depends on what your time frames and objectives are. If you're not needing to reduce your monthly payments, then you should consider getting a shorter term loan such as a 20 year or maybe even 15 year.
The rates on the 20 and especially the 15 year will be better than the 30 year and more of your payment each month will go towards building equity.
Since your current balance will be lower after 7 years, the payments for the 20 year shouldn't be much different than what you are currently paying now. Definitely worth looking into.
The rates on the 20 and especially the 15 year will be better than the 30 year and more of your payment each month will go towards building equity.
Since your current balance will be lower after 7 years, the payments for the 20 year shouldn't be much different than what you are currently paying now. Definitely worth looking into.
If you are saving money, then you can take a look at how long it will take to recoup your closing costs. closing cost / savings = # months to recover. Also, if you are saving money and it makes sense to do the loan, try paying an extra payment a year, add to the principal each month by half of your montly savings. Good Luck