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11-02-2011, 12:36 AM
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1 posts, read 1,745 times
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I have a 15 year mortgage, 1 year old, at %3.875 APR. The balance is about $221000. I have a Refi offer for %3.25 with $1050 closing costs or %3.375 with no closing costs. the agent says Iw ill save $150 a month, is that true? should I do the Refi?
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11-02-2011, 09:37 AM
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Location: Las Flores, Orange County, CA
26,342 posts, read 90,524,992 times
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There are numerous "Should I Refinance?" calculators on the internet. I would try several of them and see if there is a slam dunk consensus amongst them based on the assumptions you provide.
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11-02-2011, 01:31 PM
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255 posts, read 497,967 times
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Quote:
Originally Posted by sfenoid
I have a 15 year mortgage, 1 year old, at %3.875 APR. The balance is about $221000. I have a Refi offer for %3.25 with $1050 closing costs or %3.375 with no closing costs. the agent says Iw ill save $150 a month, is that true? should I do the Refi?
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Using the 3.875% vs. 3.375% on a 15-year fixed mortgage of 221k, the following are the approximate payments:
3.875%: 1706/mo
3.375%: 1566/mo
150/mo sounds about right... but you will have to restart your 15-year schedule again, which means you will pay one extra year if you refinance. That would be 1566 x 12mos = 18,000+.
I don't think it makes much difference either way. |
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11-02-2011, 04:48 PM
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12,823 posts, read 23,160,254 times
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If you pay extra principle you can still complete it on the original schedule.
Instead of looking at the monthly cost, look at the total cost of interest for the remaining life of your current loan vs the life of the proposed loan. As suggested you can use online calculators to accomplish this. Play around with less and more aggressive pay off schedules, ranging from 15 down to 7.5 years. Then you can make a decision purely informed by total cost.
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11-02-2011, 05:25 PM
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Location: Glendale, CA
1,299 posts, read 2,418,486 times
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It also depends on what your goal is (i.e. is it to reduce your monthly payment due to cash flow issues?), and how long you expect to own your house.
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