Is a Mortgage refinance for me?

Currently I have been in the same house for 9 yrs and have always paid an extra approx. $175 a month average on the principal. The original loan was for 92,500 and the current pay-off is at 52,XXX. Should I look into refinacing at this time or just continue to pay extra on my payment as I have been doing. Currently, 6%, 30yr. fixed rate. I've tried playing with numbers a bit and haven't really seen any huge advantage unless I can drop to 4% 30yr.(and paying the usual).

 

4% may be a little optimistic as Wells Fargo has been hovering on average around 4.25% on a 30 year fixed. The question is how much is the refi going to cost you and will you benefit. My wife and I just refinanced down to 4.375% on a 30 year fixed. We could have gotten a lower rate but the loan fees would have been in around $6k. We ended up paying $800 and will save roughly $30,000 over the length of the loan but we owe $280k. Your amount is small so it may not be much of a benefit unless you can keep the loan fees way down.

 

Talk to Dead Heretic , that's what he does for work

 

I have a calculator I built in excel to run re-fi numbers.

I plugged in your info (minus your escrow since you didn't list)

 

Thanks for plugging the numbers for me...where I come into problems with is the refinance vs. paying over my principal payment. Last I was told was unless I can drop at least 2% it wasn't really a viable option when closing costs got figured in. I didn't include escrow due to the fact that it's kinda like herpes...you can try to hide it but it ain't going away.

 

Yes and do it - im actually a loan officer and here are my 2 cents worth - refinance at a 10/15 year fixed rate and your payment may end up being about the same but what you are saving is the months off your note. Yes, refinances do cost money but you would be looking at about $3k closing on average but if you do the math you will save that on the overall cost of interest that you are currently paying.

I also see that you pay additional towards your monthly payment each month. If you are being honest that is awesome and thats the best way to pay down your debt quicker since most people pay the minimum amount due.

I strongly suggest you refinance because with the way the market is a 6% rate is way to high on a mortgage.

I understand why most go with a 30 year mortgage but if people do the math (real math) you will see the savings on a 10-15 year note even though your monthly payment will be higher.

This refinance deal all depends if you have your money for what the actual refinance will cost you at time of closing (roughly $3k). good luck in what you choose to do.

 

Talk to your mortgage holder, instead of refinance just lower your rate. Cheaper that way.

 

I don't think it's that easy...otherwise everyone would be doing that and no one would re-fi.

 

It is that easy. Still pay to do it, but cheaper!

 

Haha you're telling me. I have a 6.75, which was a great rate when I bought my house in 2007.

I have been wanting to re-fi for a while but I'm upside down on my house. I'm at about ~120% LTV now. However, based on the modifications to the HARP program (now allows up to 125% LTV) going into affect this month. I plan on calling about a re-fi on my house this week. If they say they can, I'll probably wait til February when I get my bonus so I can pay the closing costs in cash rather than rolling them into the loan.

 

this house stuff is a big headache ....im still learning it!! and theres also deductions or exemptions that can help lower your cost as well...

 

I've never heard of someone being able to do that. Hmmm..interesting. I guess I can call, doesn't hurt to try. HAHA

 

^^^^^

 

Big Banking Business what took you so long??

 

Just for reference, Dec 2010 got refinanced on a 15yr 3.99% (65K + 5K closing). Just sold my home, and the loan was at 66K, but the payments + escrow were $400/mnth cheaper. I feel refinance was helpful since my wife got laid off.

Just bought a house with a loan of 175K, 4.25% 30yr. Payments after escrow and PMI are ~1400. (Job relocating me)

 

haha were puttin you to work x2....work and TW

 

I see said the blind man to his deaf son, who was not in the room, yet nodded in agreement.

Your advice sounds great and need to do the 15 yr refin myself & will take the suggestion on trying local!
Thanks to the OP for asking the question.

 

absolutely. my wife and i refi'd to a 15-year @ 3.75% less than a year ago when rates were at all-time lows. they are even lower now i believe. keep in mind your final rate will be determined in part by your credit score/worthiness, regardless of what is advertised. everyone gets a 30-yr. mortgage cause it's easiest to afford, but if you run the long-term numbers it's obvious no one can "afford" to pay the interest incurred over such a long term. just my 2 cents

 

so you start with the 30 then refi to the 15?

 

I think tomorrow or Friday I will shop around for a 15yr mortgage... Based upon what I owe vs. the homes value I think I shouldn't have an issue.

As far as paying extra on the mortgage every month, what I have been doing all this time is:

1. rounding up to the nearest hundred dollars, even if it cost me $98.75 a month. Then,

2. adding another $100 dollars on top of that.

When I sat down and crunched numbers when I originally got the loan, I was told to pay ahead at least a $100 a month and the loan duration should drop down to 17.8yrs. or so.


Another on-topic question: For the loan closing cost, should I just pay that out of pocket or finance that into the loan...I would rather cough up 3K in advance and pay this MFer off...