Posted on: 06th Jan, 2012 10:13 am
i'm planing to refinance my current mortgage $230,000, 4% interest rate, 14 years left with 3.5% interest rate. the fee is around $2600. should i refinance it? the reason is i'll be retire within 6-7 years. i want to have a debt free. and i did refinance it last year. thanks...........
What is you new loan amount going to be. What is your old loan amount. What is the new term. What is the new interest rate. What is your current interest rate. What is your monthly savings. Would need to know this to make an honest assement.
Hi Chris,
Sorry I forgot to mention them as previous post. The old load amount: 230,000.00 for 15 years. The new loan is 230,000.00. The new interest is 3.5% (estimate). The current interest rate is 4.0%. Currently I paid 1,738/mo and I paid extra monthly 437.00 to bring it down to 10 years term. If I refinanced it to 10 years term, the payment would be 2274. Using refinance calculator, I could save about 27,828 in interest over the life of the loan. Thanks for your quick reply!!!!!!!!
Sorry I forgot to mention them as previous post. The old load amount: 230,000.00 for 15 years. The new loan is 230,000.00. The new interest is 3.5% (estimate). The current interest rate is 4.0%. Currently I paid 1,738/mo and I paid extra monthly 437.00 to bring it down to 10 years term. If I refinanced it to 10 years term, the payment would be 2274. Using refinance calculator, I could save about 27,828 in interest over the life of the loan. Thanks for your quick reply!!!!!!!!
Yes if this was my loan, and I could afford the 10yr payment, I would consider taking it. Even if you pay out of pocket for the 2600 in closing costs, you would be saving alot of money over the life of the loan. Key is, not to refinance again, or you do not realize the money you invested in higher payments, and the closing costs. If you stay on this loan for 10 years and pay it off, you will save about 33k in finance charges. So the decision should come down to can you make the 10 year payment? Do you think in 5 years you will still be able to make that higher payment? If so, then go for it. Rates will probably never be as low as they are in this period. Good luck.
Chris,
I don't need to pay the fee out of my pocket it will be added in principal balance. I will consider your advise and If I did not receive any more post. I would rate this 5 stars * * * * *
NOTE: The forum need an advisor like you! Thanks!!!
I don't need to pay the fee out of my pocket it will be added in principal balance. I will consider your advise and If I did not receive any more post. I would rate this 5 stars * * * * *
NOTE: The forum need an advisor like you! Thanks!!!
Over time.... Refinancing pays off.
Is this Conventional or FHA?
I would suggest shopping.... And remember that rates and fees o hand in hand.
3.25% would be a better deal.... even if you had to pay an extra $1000 or so in fees.
Get more offers.... And one lender 'should' be able to offer more than one deal.
Is this Conventional or FHA?
I would suggest shopping.... And remember that rates and fees o hand in hand.
3.25% would be a better deal.... even if you had to pay an extra $1000 or so in fees.
Get more offers.... And one lender 'should' be able to offer more than one deal.
Hi Tom,
This is conventional loan. and I already shopped around and indeed I had to pay 1000 more to have the rate of 3.25%. THANK YOU VERY MUCH for the advise!!! Your replied should earn 5 stars rating!!!
regards,
long
This is conventional loan. and I already shopped around and indeed I had to pay 1000 more to have the rate of 3.25%. THANK YOU VERY MUCH for the advise!!! Your replied should earn 5 stars rating!!!
regards,
long
Hello dragon,
Nothing more to say. Yes because you will be mortgaged.
:idea:
Nothing more to say. Yes because you will be mortgaged.
:idea:
You may have a financial calculator but sounds like there are manyoating around. You need to speak with a LO to get some advice and come armed with a recent mortgage history so LO will have some third-party verification of your numbers which appear to be a bit garbled.
If your existing mortgage has a fixed rate, your monthly P&I is $1,701.28, not $1,738. I assume byou mean yg $2,179.28 [$1,701.28 + $478] for 12 months and continue paying this amount, you have 128 months remaining and an effective 140-month mortgage. Current mortgage balance under this scenarios would be around $212,735. So on your proposed refinanceetirement comments as if this is what you want to do.
Tomburris is 100% correct about the 3.50% rate. Even at 3.25%, you should have a bit under $1,000 to offset that $2,600 fee. Forget that $27,828 savingthe life of thea sucker bet at best – remember the cost of capital effect on NPV and the non-intuitive results of exponential functions. Look at the scale of a slide ruler if nothing else. Better strategy is to force compare existing and refinance alternatives at the lower of projected remaining loan terms and shot for a break-even point on costs in a two to three-year range. Viewed this way even at the 3.5% rate and financing the $2,600 yo break even around 23 months so technically falls within the 2 ro 3-year payback but your life-of-the-loan UNDISCOUNTED savings are only a bit over five grand. Reduction of around $35/month on an effective 119 month term soeal snoozer. Keep paying the $2,179.28 and you get only marginal decrease in loan term. Shorter term mortgages are strange this way gain the effect of exponential calculations.
If your existing mortgage has a fixed rate, your monthly P&I is $1,701.28, not $1,738. I assume byou mean yg $2,179.28 [$1,701.28 + $478] for 12 months and continue paying this amount, you have 128 months remaining and an effective 140-month mortgage. Current mortgage balance under this scenarios would be around $212,735. So on your proposed refinanceetirement comments as if this is what you want to do.
Tomburris is 100% correct about the 3.50% rate. Even at 3.25%, you should have a bit under $1,000 to offset that $2,600 fee. Forget that $27,828 savingthe life of thea sucker bet at best – remember the cost of capital effect on NPV and the non-intuitive results of exponential functions. Look at the scale of a slide ruler if nothing else. Better strategy is to force compare existing and refinance alternatives at the lower of projected remaining loan terms and shot for a break-even point on costs in a two to three-year range. Viewed this way even at the 3.5% rate and financing the $2,600 yo break even around 23 months so technically falls within the 2 ro 3-year payback but your life-of-the-loan UNDISCOUNTED savings are only a bit over five grand. Reduction of around $35/month on an effective 119 month term soeal snoozer. Keep paying the $2,179.28 and you get only marginal decrease in loan term. Shorter term mortgages are strange this way gain the effect of exponential calculations.