Linda marshall
Level 2 Member
OK, all of you numbers people! Here is a (hopefully) relatively simple warm up math exercise to get your juices flowing this morning!
I'm stuck and need some direction deciding about whether or not it is worth it to refinance our mortgage at a lower rate rather than just accelerate payments and avoid closing costs.
Here are the numbers:
Current loan: 150K 30 year fixed at 4.53%. Currently about $130K and 276 months remain on the loan (**due to accelerated pymts. see below)
Current payments: 1042 (includes $233 property tax + $41 insurance)
** We pay an additional $175/month towards the principal (and have thus paid 7 years since the loan originated 5 years ago) We could pay up to $1300/month.
Possible refinance would be for remaining 130K. 15 year fixed rate with interest rate to somewhere in 3.375%-3.5% range with closing costs ranging from $2500-$3000 which we would NOT roll into the loan.
Home value: around 260-270K
We have been in the home since 2003 and intend to stay for 15-20 years.
Credit score is good-excellent (749ish)
I think those are the numbers required, if there is something I left out, please let me know.
Again, here is the question: Given closing costs, is it worth refinancing at a lower % rate? Or should we keep the loan we have and accelerate payments to get it paid off sooner at the higher % rate?
At this point, I am stuck because I am not a numbers-gal and I also don't entirely trust the online lenders I am in contact with, who of course, assure me that they can "save me a bundle". (Note: I am well read on how to avoid refinance scams, I just don't know which numbers to believe). My SO talked to a retired mortgage broker who quickly calculated that refinancing would only save us $10 a month. I don't know what rate he was factoring in, but I do know that he was rolling the closing costs into the loan amount, which we wouldn't do. When I run the numbers myself (which in all likelihood I am doing incorrectly) I see that there is considerable savings by refinancing (40-50K over life of loan). I'm confused by the discrepancies and hoping that someone is up for the challenge of running these numbers for me and providing some clarification!!
You have my eternal gratitude, AND if you are going to be in Las Vegas in November, I'll buy you a drink for your trouble!!
Thanks!
Linda
I'm stuck and need some direction deciding about whether or not it is worth it to refinance our mortgage at a lower rate rather than just accelerate payments and avoid closing costs.
Here are the numbers:
Current loan: 150K 30 year fixed at 4.53%. Currently about $130K and 276 months remain on the loan (**due to accelerated pymts. see below)
Current payments: 1042 (includes $233 property tax + $41 insurance)
** We pay an additional $175/month towards the principal (and have thus paid 7 years since the loan originated 5 years ago) We could pay up to $1300/month.
Possible refinance would be for remaining 130K. 15 year fixed rate with interest rate to somewhere in 3.375%-3.5% range with closing costs ranging from $2500-$3000 which we would NOT roll into the loan.
Home value: around 260-270K
We have been in the home since 2003 and intend to stay for 15-20 years.
Credit score is good-excellent (749ish)
I think those are the numbers required, if there is something I left out, please let me know.
Again, here is the question: Given closing costs, is it worth refinancing at a lower % rate? Or should we keep the loan we have and accelerate payments to get it paid off sooner at the higher % rate?
At this point, I am stuck because I am not a numbers-gal and I also don't entirely trust the online lenders I am in contact with, who of course, assure me that they can "save me a bundle". (Note: I am well read on how to avoid refinance scams, I just don't know which numbers to believe). My SO talked to a retired mortgage broker who quickly calculated that refinancing would only save us $10 a month. I don't know what rate he was factoring in, but I do know that he was rolling the closing costs into the loan amount, which we wouldn't do. When I run the numbers myself (which in all likelihood I am doing incorrectly) I see that there is considerable savings by refinancing (40-50K over life of loan). I'm confused by the discrepancies and hoping that someone is up for the challenge of running these numbers for me and providing some clarification!!
You have my eternal gratitude, AND if you are going to be in Las Vegas in November, I'll buy you a drink for your trouble!!
Thanks!
Linda