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Old 04-22-2010, 08:47 AM
 
Location: Lancaster County, PA
1,740 posts, read 3,973,187 times
Reputation: 828

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We're seven years into a 30-year fixed rate mortgage at 5.625%. We're hoping to refinance around $95,000 and save $100 a month. I've been told by two finance companies that refinancing isn't worth our time. Do you agree?

Thank you for your thoughts.
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Old 04-22-2010, 09:26 AM
 
Location: Plano, Texas
1,675 posts, read 6,618,922 times
Reputation: 693
That depends... Do you need a lower mortgage payment to pay off other debt? How long you keeping this home? If the lower rate saves you $100 per month but you continue to pay the same amount, you will probably cut the new 30 year mortgage down to 20 years saving you 3 years of payments.

All depends on what your goals are.
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Old 04-22-2010, 11:03 AM
 
Location: Columbus, Ohio
33 posts, read 150,740 times
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Also if you wanted just a temporary lower payment, you might be able to to take another 5.625 rate with virtually no closing costs (get some of them lender credited) and use some temporarily relief.
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Old 04-22-2010, 11:07 AM
 
Location: Lancaster County, PA
1,740 posts, read 3,973,187 times
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Quote:
Originally Posted by VictorBurek View Post
That depends... Do you need a lower mortgage payment to pay off other debt? How long you keeping this home? If the lower rate saves you $100 per month but you continue to pay the same amount, you will probably cut the new 30 year mortgage down to 20 years saving you 3 years of payments.

All depends on what your goals are.
We're trying to lower our monthly payment by $100.

After playing the Bait and Switch game I did find someone who was honest about their rates and we going to stick with them.
Thanks.
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Old 04-22-2010, 07:45 PM
 
Location: MID ATLANTIC
8,152 posts, read 20,033,970 times
Reputation: 9391
Quote:
Originally Posted by lititzman2003 View Post
We're trying to lower our monthly payment by $100.

After playing the Bait and Switch game I did find someone who was honest about their rates and we going to stick with them.
Thanks.
Amazing, isn't it. You know if you are getting "real" rates if they will lock you in, right then. Everything else is just a fairy-tale.
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Old 04-23-2010, 05:34 AM
 
Location: Lancaster County, PA
1,740 posts, read 3,973,187 times
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Quote:
Originally Posted by SmartMoney View Post
Amazing, isn't it. You know if you are getting "real" rates if they will lock you in, right then. Everything else is just a fairy-tale.
It can be frustrating, that's for sure. Like others said on my other thread companies will claim you can get a loan for one rate and they when you contact them, the rate they quote you is usually more then one percent higher. What's the point in wasting a consumer's time? Don't they realize everyone does their homework? I did find someone who was straight about their rates right from the start. We got in at 5% and we'll save $100 a month. He was upfront about the closing costs as well.
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Old 04-23-2010, 06:15 AM
 
Location: Wake Forest, NC
835 posts, read 3,739,755 times
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$95,000 loan at 4.375% for 15 years is $720.69 a month for P&I. Definitely worth consideration for you. You don't say what your current payment is or what part is P&I so can't tell if it meets your goals.
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Old 04-23-2010, 09:15 AM
 
Location: MID ATLANTIC
8,152 posts, read 20,033,970 times
Reputation: 9391
Some guidelines state your savings must be a minimum of $50 a month. Oddly, they don't say anything about how much it costs you to get to that $50........like adding another 20K in expenses.

No one should be your judge as to what makes sense for you. We can tell you how many months it will take to pay for itself, but if the savings makes the difference of you eating beans and rice every night or eating a healthier dinner, who is to say what is best. That $100 a month can pay for after school childcare so that a second adult can work. At the end of the day, it's your decision.
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Old 04-23-2010, 12:52 PM
 
Location: Sacramento
2,568 posts, read 6,192,980 times
Reputation: 1924
Quote:
Originally Posted by lititzman2003 View Post
We're seven years into a 30-year fixed rate mortgage at 5.625%. We're hoping to refinance around $95,000 and save $100 a month. I've been told by two finance companies that refinancing isn't worth our time. Do you agree?

Thank you for your thoughts.
There are many calculators on the internet that will tell you how much more or less interest you will pay if you refinance. Then you also have to consider your break-even point. How many months will it take you to make up the cc and actually be saving $100/month.
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Old 04-23-2010, 02:36 PM
 
Location: Lancaster County, PA
1,740 posts, read 3,973,187 times
Reputation: 828
I have since found out that the reason the companies who told me it wasn't worth refinancing had higher interest rates then I thought. I found their low rates splashed across their Webpages, called them with that number in mind, only to find out the real rates were 1-2 points higher. They told me it wasn't worth it then they told me their real rate. Classy.

I did find a company that was honest with their rates from the start and we applied for the loan with them. They even spelled out the total closing costs. Very easy to understand. We're paying the closing costs upfront and saving $100.00 a month, which was our original goal.
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