Posted on: 05th Jul, 2010 02:14 pm
My mortgage balance is about 135,000 at a rate of 5.625. We have been paying an extra 1,400 per month to the principle and should have it paid off in 5 years. Is it worth refinancing to a 4.1% 15 year loan or should we just keep paying down the balance?
Yes it sounds like refinancing would be beneficial as long as the closing costs aren't too high. What state are you in?
We can not accurately answer your question. We know you pay $1,400 extra, but we do not know what your present required principal and interest payment is.
We know the new required P&I payment would be $1,005, but, we do not know what you presently pay to compare apples to apples. Because you pay extra and will pay pay off in five years, even though the new rate is lower, you may end up only saving one payment or so.
What is your present required P&I?
Or, what balance did the mortgage start at and did it start as a 15 or 30 year mortgage?
We know the new required P&I payment would be $1,005, but, we do not know what you presently pay to compare apples to apples. Because you pay extra and will pay pay off in five years, even though the new rate is lower, you may end up only saving one payment or so.
What is your present required P&I?
Or, what balance did the mortgage start at and did it start as a 15 or 30 year mortgage?
I think refinancing will be better option in your case.