Posted on: 02nd Aug, 2010 08:37 am
I have 24 years and $107,000 left on a 30 year mortgage. My mortgage company offered to lower my rate from 5.75 to 4.75 with no closing costs. I would have to add the 6 years back however. Since most of the higher interest rates are towards the beginning of the loan, and I have been paying an extra $250.00 every month towards the principal, does it pay to switch?
Hi beth!
Welcome to forums!
If you wish to stay in the property for a longer period of time, then it would be a good idea to refinance the home loan. If you're not concerned about the term of the loan, then it would be a good option to go ahead with the deal.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you wish to stay in the property for a longer period of time, then it would be a good idea to refinance the home loan. If you're not concerned about the term of the loan, then it would be a good option to go ahead with the deal.
Feel free to ask if you've further queries.
Sussane
With your ability to pay an extra $250.00 per month, I would ask that you look into a 20 year or a 15 year loan term. Rates for those terms are equally or better to then the 30 year term. It's worth your while to analyze the difference in payment, advantages in paying your mortgage sooner than later. Let me know if I could answer any questions.
My opinion? Keep paying the extra $250 monthly - that's $3000 annually you are shaving off the balance, and that'll save you at least as much as a shorter term refinance might, especially considering that you'll have costs incurred in the refinance transaction. That's something you cannot avoid. You're doing the best thing you can do by prepaying that way. Keep it up.
