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Old 01-23-2008, 08:21 AM
 
622 posts, read 2,849,739 times
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I briefly looked online and saw 2 banks offering them. When you select a 30 year, you get about 25 results.

Here's my position. I have a 30 year fixed at 5.375% from 2003. Somehwere around $220k loan. I've been paying $500/month extra principle payments on it and will have it paid off in January of 2019 (11 years from now). If I got a 10 year loan (are they even available?), Would today's rates be competitive enough to warrant the refinance into a 10 year instead of the 30 year I have?

As it is, I'm looking at 11 years until payoff. If I change it to 10 years, that would be great if the payment stayed the same.

I now pay roughly $1230 + $500 in principle.

What are the 10 year fixed rates these days, and would that be an option for me? I see this morning rates are as low as they've been since 2003.

Any thoughts on the matter would be appreciated.


****Edit** Important info. There is roughly $170k left on the loan now.

Here is the payoff in years to come..

January 09- $158-$160k left on mortgage

Jan 2010- $145- $147 left

2011- $132-134 left

2012- $117-119

2013 $103- 105

etc..

Last edited by NewJersey?; 01-23-2008 at 08:33 AM..
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Old 01-23-2008, 08:32 AM
 
Location: Oz
2,238 posts, read 8,696,279 times
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Well, I'm not quite sure exactly how it works, but 10yr loans aren't very attractive to banks for one simple reason -- they're not going to make much money from you because you're not going to be paying interest for a long time. I would suspect the interest rate on a 10yr would probably be higher because of this, and I doubt you'd find anywhere near the same monthly payment because of it. The bank wants to make their money somehow.
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Old 01-23-2008, 08:35 AM
 
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Thanks. I just edited in the amounts of the current loan.

I see that a 15 year rate is lower than a 30 year, so I just assumed that a 10 year may be lower as well. Surely it doesn't work that easily. lol
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Old 01-23-2008, 08:38 AM
 
Location: Charlotte, North Carolina
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10yr loans are lower than a 15....you should be able to get one for around 4.5-4.625% (1% origination fee).

I'm not sure if the payment will be the same.
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Old 01-23-2008, 08:38 AM
 
622 posts, read 2,849,739 times
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I'm all over the place with these edits. lol

I guess what I'm asking is would a $170k, 10 year loan, be more or less than $1730-1775/month. Right?
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Old 01-23-2008, 08:39 AM
 
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Thanks renriq02. Good to know. Just saw your reply after I posted mine.
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Old 01-23-2008, 08:43 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,094,482 times
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I placed 175k as your loan amount to include payoff of mortgage/plus interest, and typical closing costs.

Payment is 1824.74 that doesnt include taxes/insurances. (escrows)
4.625% rate

The reason it's going to be higher is because your old amortization is a lot longer than this one(by 20yrs). With your current loan YOU are paying more as you go....with the 10yr...you are required to pay.
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Old 01-23-2008, 09:19 AM
 
622 posts, read 2,849,739 times
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Quote:
Originally Posted by renriq02 View Post
I placed 175k as your loan amount to include payoff of mortgage/plus interest, and typical closing costs.

Payment is 1824.74 that doesnt include taxes/insurances. (escrows)
4.625% rate

The reason it's going to be higher is because your old amortization is a lot longer than this one(by 20yrs). With your current loan YOU are paying more as you go....with the 10yr...you are required to pay.


Hmmm, it doesn't seem worthwhile. Roughly $75-$100/month higher payment for about a year off the loan.

Thanks for the info. It was worth a look, at least. I saw rates going down a lot and figured I may be able to look into it. Maybe if they keep dropping (lol), I may still have a chance.

I do hope others can take advantage of this great interest rate environment while they can. I did that in '03' and it seems to be paying off. I chose a 30 year at 5.375% with zero points/fees (yes it's true) instead of a 15 year @ 4.785% (no fees). Good times.

Thanks for the help!
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