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Old 10-02-2016, 01:16 PM
 
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Q. If someone had a $500k loan with 4.2% APR for 15 years and they paid off $400K over the years, now they can get a 3.2% APR to refinance remaining balance, is it worth it or not? Refinance expenses are standard and home would appraise easily. In end is there going to be any net saving? I know there can be several other factors but this is all the information I was given so let's work with given data.
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Old 10-02-2016, 05:07 PM
 
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My realtor friend said two points is the general rule for whether it's worth it. I'll try to find the calculator I had up the other day telling me where I stand (I can save exactly two points). (in theory - that's another thread).
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Old 10-02-2016, 05:08 PM
 
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Refinance Calculator - Calculate Your Savings from Refinancing
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Old 10-02-2016, 05:10 PM
 
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ps I think you have to put in your current payment minus the escrow to compare....
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Old 10-02-2016, 06:45 PM
 
Location: Austin
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If you've been paying long enough to only have $100k left of the loan, most of your payments are going to principle, not interest so I think you would be kicking yourself to start the amortization over again where the first few years are majority interest and hardly much going to principle.
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Old 10-02-2016, 07:23 PM
 
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I think that one point is not enough to be worth it after all the costs are factored in and it's a giant hassle.

Just make extra payments on what you have and watch it go away!
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Old 10-03-2016, 07:16 AM
 
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You are 3/4 done paying on a 15 year mortgage, best to stick with it you don't have much longer before it's paid off.
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Old 10-03-2016, 10:49 AM
 
Location: Phoenix, AZ > Raleigh, NC
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Quote:
Originally Posted by falconheadwest View Post
if you've been paying long enough to only have $100k left of the loan, most of your payments are going to principle, not interest so i think you would be kicking yourself to start the amortization over again where the first few years are majority interest and hardly much going to principle.
this ^^^^^^
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Old 10-03-2016, 04:42 PM
 
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Quote:
Originally Posted by FalconheadWest View Post
If you've been paying long enough to only have $100k left of the loan, most of your payments are going to principle, not interest so I think you would be kicking yourself to start the amortization over again where the first few years are majority interest and hardly much going to principle.
that actually has nothing to do with anything. If there is a two point drop and one definitely is going to keep the loan for at least 3-5 years it's worth it.

The problem for the OP is that a 1 point drop is not worth the costs. When you roll them in or pay them and subtract from what you save on interest, it doesn't make sense.

Better just to pay extra and make it go away.
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Old 10-04-2016, 08:32 AM
 
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Double posted thread (see also Personal Finance). You all may not know that OP's friend wants to use extra cash flow to pay for educational expenses...
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