Posted on: 15th Jul, 2010 07:28 am
if i have 12 years left on a mortgage at 6.125 interest rate and the new interest rate is 5.125, it it possible to refinance at 5.125 and still retain the 12 years length of time remaining on the mortgage?
please note: i am really interested in retainging the number of years left on the motgage. i do not want to refinance at 15,20 or 30 years when i only have 12 years left. is this possible?
thanks
please note: i am really interested in retainging the number of years left on the motgage. i do not want to refinance at 15,20 or 30 years when i only have 12 years left. is this possible?
thanks
Roy, I don't think you'll find any 12 year maturities out there; however, 10-year loans exist and the bullet you might have to bite wouldn't necessarily be all that much larger given the 2-year difference in term. Investigate this and see if it's acceptable. The only other alternatives are 15 years or sit on what you've got.
5.125% is a really high interest rate for a 15-year fixed right now, is there anything unusual about your refinance? Non-owner occupied 4 unit or a super small loan amount?
If it's worth refinancing (another thread) then you could refinance into the lower rate 15-year fixed and just make 12-year amoritzed payments each month. The payment listed on the mortgage statement is just the minimum that is required, there is no law saying you can't pay more than that. $100k @ 5.125% is a $797.32/mo minimum payment, but you'd just make a $931.17/mo payment (12-year amortized) the entire time in order to pay it off in 12 years (144 months).
If it's not worth refinancing because your loan amount is smaller and the amount of interest saved over 12 years doesn't meet & exceed the amount of your refinance settlement costs, then to save more interest than you are saving now, just apply additional money each month and mark on the return payment stub "Apply to principal" (or online you can do that too).
If it's worth refinancing (another thread) then you could refinance into the lower rate 15-year fixed and just make 12-year amoritzed payments each month. The payment listed on the mortgage statement is just the minimum that is required, there is no law saying you can't pay more than that. $100k @ 5.125% is a $797.32/mo minimum payment, but you'd just make a $931.17/mo payment (12-year amortized) the entire time in order to pay it off in 12 years (144 months).
If it's not worth refinancing because your loan amount is smaller and the amount of interest saved over 12 years doesn't meet & exceed the amount of your refinance settlement costs, then to save more interest than you are saving now, just apply additional money each month and mark on the return payment stub "Apply to principal" (or online you can do that too).
