should i refinance my mortgage? (loan, interest rate, credit card, fees)

[patty423]

I owe $126,434 at 5.99% with 12 years 7 months left on mortgage. This past July I started putting an additional $300 per month towards my principal. When I did the online calculator it said I will have my loan paid off in 9 years and 3 months saving $15,906 in interest. At one bank the rate is down to 4.375% for 10 years. Is it better to refinance or to keep putting the additional $300 per month? Thanks for any guidance you can give.

[VictorBurek]

It will depend on the closing costs but you should look into it. If you can provide us with how much your current principle and interest payment is(not with the extra $300) and approximate amount of closing costs, someone on here can probably provide you with the proper advice.

I would think on the surface it makes sense.

[dick1973]

I would never refinance, just keep on doing what you are doing. Refinance Closing cost are pissing your money away, banks love refinance. Extra payments to the principal and double payments are the way to go. Forget about that new car. Make payments to your mortgage will save thousands.

[photobuff42]

Originally Posted by patty423

I owe $126,434 at 5.99% with 12 years 7 months left on mortgage. This past July I started putting an additional $300 per month towards my principal. When I did the online calculator it said I will have my loan paid off in 9 years and 3 months saving $15,906 in interest. At one bank the rate is down to 4.375% for 10 years. Is it better to refinance or to keep putting the additional $300 per month? Thanks for any guidance you can give.

Where is the online calculator?

[volk2k]

Based on the OP's 9 years and 3 months till payoff, $126,434 balance, and 5.99% interest rate.... She looks to be paying approximately $1487 per month. Which means that her actual current monthly Principle/Interest payment is $1187 per month.

OP, if you can actually get your rate down to 4.375% and continue to pay $1487 per month, your loan will be paid off in 8 years and 7 months....

That is 8 fewer months that you would be paying $1487 (as opposed to the 5.99% plan of attack)....

8x$1487 => $11896 savings

Obviously you need to factor in your closing costs to get the absolute value here, but you get the point.

In this case, it's probably in your best interest to refinance if you are willing to contnue paying the $1487 per month... your house will be paid off faster and you will save more money. Refinancing would not just be pissing your money away in this case.

However, you haven't let us know exactly what you are trying to accomplish here and what your complete financial picture is. Is this $300 extra a month sustainable? Do you want to keep your payment term at 9 years and 3 months but just reduce your monthly payment? Do you think there is a chance you may lose your job or have to move? Do you have an emergency fund?

All this being said, I'd say that in almost of the scenarios you might throw at us, refinancing down to 4.375% will probably be the way to go.

Good luck!

[VictorBurek]

Originally Posted by volk2k

Based on the OP's 9 years and 3 months till payoff, $126,434 balance, and 5.99% interest rate.... She looks to be paying approximately $1487 per month. Which means that her actual current monthly Principle/Interest payment is $1187 per month.

OP, if you can actually get your rate down to 4.375% and continue to pay $1487 per month, your loan will be paid off in 8 years and 7 months....

That is 8 fewer months that you would be paying $1487 (as opposed to the 5.99% plan of attack)....

8x$1487 => $11896 savings

Obviously you need to factor in your closing costs to get the absolute value here, but you get the point.

In this case, it's probably in your best interest to refinance if you are willing to contnue paying the $1487 per month... your house will be paid off faster and you will save more money. Refinancing would not just be pissing your money away in this case.

However, you haven't let us know exactly what you are trying to accomplish here and what your complete financial picture is. Is this $300 extra a month sustainable? Do you want to keep your payment term at 9 years and 3 months but just reduce your monthly payment? Do you think there is a chance you may lose your job or have to move? Do you have an emergency fund?

All this being said, I'd say that in almost of the scenarios you might throw at us, refinancing down to 4.375% will probably be the way to go.

Good luck!

Great post. Amazing when you put the numbers to it you can make an educated decision.

[Boompa]

I'd hang in there, with what you are doing, closing costs will eat up any gain you get.

[patty423]

My husband is a NYC firefighter so job is secure. We will not be moving. My husband is 55 years old and I would like him to retire in 5 years. We have 2 kids in college and a 13 year old so this is a balancing act of helping kids pay for college, saving for college for 13 year old and paying down mortgage. We have no credit card debt.

My current mortgage payment is 1,195. I pay my taxes separately. Bank of Americas online calculator says paying additional 300 per month, total int w/o pre-pay 54,766, total int with pre-pay 38,860, int saved 15,906, reduction in term 3.7 years, payoff date 3/2019.

Todays refinance rate quotes are:
10 yr fixed @4.625% zero points, Prin + int = 1,318.66, total int will pay 31,740
closing cost and fees 4,258, rolled into mortgage = new prin + int 1,363 new total int 32,819
OR
10 yr fixed @4.375%, .75% point, prin + int = 1,303, total int will pay 29,911
closing cost and fees 4,258 + 948.75 point = 5,180 rolled into mort = new prin 1,358 new int 31,164

My goal is to pay down mortgage ASAP. I don't need additional money nor do I need a reduced payment.
My current mortgage payment + add'l payment = 1,495
I think it makes sense to refinance. I'll pay 137 less per month and save an add'l 7,695 interest.
And I can put the 137 towards my principal paying down loan sooner than 10 years.

I'm scared that I'm making the right decision.

Thanks everyone for your response.

[patty423]

Originally Posted by volk2k

Based on the OP's 9 years and 3 months till payoff, $126,434 balance, and 5.99% interest rate.... She looks to be paying approximately $1487 per month. Which means that her actual current monthly Principle/Interest payment is $1187 per month.

OP, if you can actually get your rate down to 4.375% and continue to pay $1487 per month, your loan will be paid off in 8 years and 7 months....

That is 8 fewer months that you would be paying $1487 (as opposed to the 5.99% plan of attack)....

8x$1487 => $11896 savings

Obviously you need to factor in your closing costs to get the absolute value here, but you get the point.

In this case, it's probably in your best interest to refinance if you are willing to contnue paying the $1487 per month... your house will be paid off faster and you will save more money. Refinancing would not just be pissing your money away in this case.

However, you haven't let us know exactly what you are trying to accomplish here and what your complete financial picture is. Is this $300 extra a month sustainable? Do you want to keep your payment term at 9 years and 3 months but just reduce your monthly payment? Do you think there is a chance you may lose your job or have to move? Do you have an emergency fund?

All this being said, I'd say that in almost of the scenarios you might throw at us, refinancing down to 4.375% will probably be the way to go.

Good luck!

I just wanted to say a special thank you to you. For the last 2 hours as I was trying to make my decision I kept rereading your post. It helped a lot.

[chet everett]

Originally Posted by patty423

My husband is a NYC firefighter so job is secure. We will not be moving. My husband is 55 years old and I would like him to retire in 5 years. We have 2 kids in college and a 13 year old so this is a balancing act of helping kids pay for college, saving for college for 13 year old and paying down mortgage. We have no credit card debt.

My current mortgage payment is 1,195. I pay my taxes separately. Bank of Americas online calculator says paying additional 300 per month, total int w/o pre-pay 54,766, total int with pre-pay 38,860, int saved 15,906, reduction in term 3.7 years, payoff date 3/2019.

Todays refinance rate quotes are:
10 yr fixed @4.625% zero points, Prin + int = 1,318.66, total int will pay 31,740
closing cost and fees 4,258, rolled into mortgage = new prin + int 1,363 new total int 32,819
OR
10 yr fixed @4.375%, .75% point, prin + int = 1,303, total int will pay 29,911
closing cost and fees 4,258 + 948.75 point = 5,180 rolled into mort = new prin 1,358 new int 31,164

My goal is to pay down mortgage ASAP. I don't need additional money nor do I need a reduced payment.
My current mortgage payment + add'l payment = 1,495
I think it makes sense to refinance. I'll pay 137 less per month and save an add'l 7,695 interest.
And I can put the 137 towards my principal paying down loan sooner than 10 years.

I'm scared that I'm making the right decision.

Thanks everyone for your response.

My mortgage guy is a gem -- he has lots of experience laying out the numbers in plain English so that nothing is hidden. He will even tell you WHY he gets paid and WHY lenders offer refi -- it is for them to make a fair profit off good risks like you. Sounds like your situation is about IDEAL as you have a solid handle on employment and future finances, a fact that very few people can honestly say!

If you call around be sure that you compare "apple to apples" and focus on the TOTAL points paid / fees / closing cost / RATE. If any one does not want to be straight with you OUGHT NOT allow them to waste your time. Let the lenders / mortgage broker / credit union folks know you KNOW YOUR STUFF and have done your homework. They DO NOT need your personal info to make a first cut estimate and you should have no problem getting a loan that will help you achieve your goals AND keep money in the bank!

Good Luck!