Posted on: 02nd Sep, 2010 08:47 am
Please help!
I am currently in a 30 years fixed rate mortgage with Bank of America, with a 5.125 % (we just bought the house in February 2009).
I have the possibility of refinancing with a credit union for a 20 years fixed rate with a 4.125 % - The closing costs would be approximately $ 4000 (or less since there is the possibility of doing a streamline with the title) I am not being charge for a application.
I was told that refinancing was unnecessary and that I should just pay exta each month then I am already shaving years off my mortgage, but then I was also told that the amortization of a 30 years loan is higher than that one of a 20 years.
HELP PLEASE! I already put the application out for the 20 years loan. Did I make a mistake?
What should I do?
Thanks!
I am currently in a 30 years fixed rate mortgage with Bank of America, with a 5.125 % (we just bought the house in February 2009).
I have the possibility of refinancing with a credit union for a 20 years fixed rate with a 4.125 % - The closing costs would be approximately $ 4000 (or less since there is the possibility of doing a streamline with the title) I am not being charge for a application.
I was told that refinancing was unnecessary and that I should just pay exta each month then I am already shaving years off my mortgage, but then I was also told that the amortization of a 30 years loan is higher than that one of a 20 years.
HELP PLEASE! I already put the application out for the 20 years loan. Did I make a mistake?
What should I do?
Thanks!
Hi evigusa,
I personally don't think that you did a mistake by applying for a 20 year mortgage. If you are staying in the property for the next few years, then you would be able to offset the closing costs and thus start saving. Moreover, you would be able to pay off the 20 year loan sooner compared to a 30 year mortgage if you make extra payments on it.
Thanks
I personally don't think that you did a mistake by applying for a 20 year mortgage. If you are staying in the property for the next few years, then you would be able to offset the closing costs and thus start saving. Moreover, you would be able to pay off the 20 year loan sooner compared to a 30 year mortgage if you make extra payments on it.
Thanks