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I was contacted by my mortgage company with a Rate and Term Refinance offer at No Closing Cost, No appraisal, No Requalification and No Underwriting on our equity in the home. We are told they are doing this to maintain their customer base.
Current Loan
$98547 (Pay-off will be round up to 99K) 2028 Loan Maturity, 30yr fixed 6.785%
New Numbers based on offer:
• Fixed 15 year at a Rate of 3.625%= $714.50 (principal+ taxes) 727.09 (escrow) $1441.59 (new monthly payment) $168 savings per month
• Fixed 20 year at a Rate of 4.375%= $620.25 (principal+ taxes) 725.09 (escrow) $1347.34 (new monthly payment) $262 savings per month
• Fixed 30 year at a Rate of 4.62%= $509.48 (principal+ taxes) 727.09 (escrow) $1236.57 (new monthly payment) $373 savings per month
We are considering moving within 3-5yrs. Is there any downside to a Rate and Term Refinance?
Last edited by jerome8283; 08-22-2011 at 11:53 AM..
It is costing you no money and you can reduce your monthly payment. I can't see any possible downside. Personally I would go with the 30 year since you are planning on moving in 3-5 years.
I'm pretty sure we are going with the 30yr. This is our first time refinancing and I just wanted to make sure there was nothing else we should be aware of with this type of Rate and Term Refinance plan.
If I refinance would I receive a better tax deduction since I'll be starting over with a new loan?
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