[VisualEcho]

Originally Posted by KennyFSU

Why are some of you wanting to refinance?

-lower monthly?
-cash out some equity?
-pay off loan faster?
-lower interest?

I just hate interest, period. I know I owe it, people lent me the money, but I bloody well hate it, so the less of it I can pay the better. I don't care if the loan is 200 years long, I just want less total paid in the end.

[Fakemike]

Originally Posted by KennyFSU

Why are some of you wanting to refinance?

-lower monthly?
-cash out some equity?
-pay off loan faster?
-lower interest?

I would like to pay off the loan faster.

I would like to know, is it better to just keep paying off extra principle (I'm putting an extra $500 each month) or refinance to 15 yr loan.

My current situation.

Loan was in 2014 for $140k, currently owe $98K
30 yr fixed at 4.5%
Total monthly payment is about $900 and I've been paying $1400 ($500 extra toward principal).

So is it better to just keep paying off extra principle (about $500 each month) or refinance to 15 yr loan (which would cost about $3k to $5k in closing costs).

Nerdwallet said I would save $18k but that is assuming that i'm paying the minimum.

Thanks

[KingOfJericho]

This calculator is much more detailed and will help you answer that question: https://www.bankrate.com/calculators...alculator.aspx

[Savageenterprise]

Originally Posted by RickFLM4

Have you checked to see what it looks like if you don’t take the cash out and instead refi to a 15- or 20- year term?

I didn't look into it but yeah, that would be the best option because the payment would probably only go up very slightly.

The reason we didn't is because my wife and I have taken on some additional debt for home improvement and lost some income as she dropped down to part time after we had our baby. I'm not sure if we would qualify for a higher mortgage payment along with the extra debt we've incurred.

If we take the cash, we can be completely debt free aside from the mortgage, have a decent amount of free cash to help with expenses of the next baby and on top of that I'm still lowering the monthly nut by a significant amount.

[TboneS54]

Also depends on how much the refi will cost you. It can make sense to buy the rate down (points), but for most, if you're going to refi, then pay as little as possible (no points) to do so. Find out the point (month/year) at which the cost of the refi is eclipsed by the savings. Everyone's different, but you don't want that point to be too far into the future unless you're very sure you're staying put.

Keep in mind, a cash out refi will cost you a slightly higher interest rate than a rate and term (standard) refi. That can make it or break it for some people.

[TboneS54]

Originally Posted by Fakemike

I would like to pay off the loan faster.

I would like to know, is it better to just keep paying off extra principle (I'm putting an extra $500 each month) or refinance to 15 yr loan.

My current situation.

Loan was in 2014 for $140k, currently owe $98K
30 yr fixed at 4.5%
Total monthly payment is about $900 and I've been paying $1400 ($500 extra toward principal).

So is it better to just keep paying off extra principle (about $500 each month) or refinance to 15 yr loan (which would cost about $3k to $5k in closing costs).

Nerdwallet said I would save $18k but that is assuming that i'm paying the minimum.

Thanks

Your rate isn't too high, at least historically it's quite low, but you can get under 3 now on a 15yr, so a point and a half is considerable. Considerable enough that you could take a slightly higher rate in exchange for lender paid closing and still come out well ahead.

If your rate were like 3.5-75, I'd tell you to leave it alone and keep paying some extra towards principal if you really really want to pay it off early.

At these rates, I don't really suggest paying the load off faster unless you literally have no other debt and have nothing better to do with the money.

Jealous of your $140k mortgage.

[rebekahb]

Originally Posted by KennyFSU

Why are some of you wanting to refinance?

-lower monthly?
-cash out some equity?
-pay off loan faster?
-lower interest?

When we closed on our loan our rate was 4.125% for 30 years. We didn't have to pay PMI because we had enough equity and putting money down. I pay about $500-$600 each month extra. I've done very well with bonuses the past few quarters so I want to slap down a large chunk of money and get it down to 15 years. If I don't escrow my taxes and insurances it brings my note down about $500. If I do escrow my note would be within about $100 of what it is now. I'm doing it to lower my interest rate and would love to pay off the rest of my balance within 5 years. I just hate owing someone and don't like paying bills.

[spazzyfry123]

Well you could be like me that closed on a house right before the Corona dance. If I had waited a month I would be a good chunk less in interest (not say what we have is bad by any means).

[TboneS54]

I think rates were coming down before corona so you should be good, what rate did you get?

[roastbeef]

Originally Posted by KennyFSU

Why are some of you wanting to refinance?

-lower monthly?
-cash out some equity?
-pay off loan faster?
-lower interest?

lower monthly due to lower interest. not interested in cash out. we just wrapped up a refi late last year, so term stays about the same. break even is about 5 years, and we'll be in the home a lot longer than that.

[TXSTYLE]

NOW!!

[hooligan_F39]

Originally Posted by Hawkeye

Look at credit unions as well, my bank is at 2.875% for a 30y fixed without points.

There is no time like the present if it makes sense for you!

Truth! I can't, for the life of me, figure why credit unions are so often overlooked when it comes to mortgages - especially if you're talking about a standard "conforming" loan.

[Hawkeye]

Originally Posted by spazzyfry123

Well you could be like me that closed on a house right before the Corona dance. If I had waited a month I would be a good chunk less in interest (not say what we have is bad by any means).

I closed on my house last August at 3.5%, the started my refinance in September at 3.125% (couldn't finish the refi until I made my first payment on my original loan) and I just refi'd again last Thursday at 2.75%.

Just because you just got a loan doesn't mean it doesn't make sense to refi, just look at closing costs and the break even point. Both of my refi closing costs added together still only put me at ~18 months before I break even. No brainer for me.

[infinitekidM2C]

I'm thinking of refi to a 15 year fixed. Save some coin and shorten the loan but with a bit higher payments. Problem is you cannot trust these damn refi people. You have to become a semi-expert before you go in!

[IllSic_Design]

Closed 1st week of Dec with 3.5, now you guys are making me think I should consider refi

[m630]

One recommendation to all regardless of your situation, set up bi-weekly autopay!!!! It helps and doesnt cost anything more than having the first payment liquid and reduces the term especially on a 30yr...

[vreihen16]

Originally Posted by hooligan_COLD

Truth! I can't, for the life of me, figure why credit unions are so often overlooked when it comes to mortgages - especially if you're talking about a standard "conforming" loan.

First and usually the only place that I go! Besides the excellent rates, we get free notary services, free checking and bill pay, same-day vehicle loans application-to-check, evening/weekend hours, and a free coffee bar at all branches.

I can't for the life of me figure out why people still do business with traditional banks in the 21st century.....

[Hawkeye]

Originally Posted by m630

One recommendation to all regardless of your situation, set up bi-weekly autopay!!!! It helps and doesnt cost anything more than having the first payment liquid and reduces the term especially on a 30yr...

Understand the terms of your loan first. One of my recent mortgages had the interest calculated at the beginning of the month, so inter-month payments wouldn't actually reduce any interest. If you have interest calculated daily (most mortgages I believe) then you can reduce the amount of interest slightly with the more frequent payments.

At this point, I would pay as slowly as possible and just put everything extra into the market. It is really low right now, likely going to be low for a little while and then rebound like it always does.

[TboneS54]

Agreed. Pay your mortgage down faster if it's 1984 and you've got 12% rate, but it's not, were talking sub 4%. We'll be seeing 20-30% gains in the market like we did for several years in 2011-2014 or whatever it was.

[happyjack]

http://www.mortgagenewsdaily.com/con...es/938445.aspx

looks like you may have already missed the window of opportunity! rates on the raise due to overwhelming demand!

i locked in a 20-year @ 2.75 with 0 pts on monday with my credit union.

[Clark_Kent]

Originally Posted by happyjack

http://www.mortgagenewsdaily.com/con...es/938445.aspx

looks like you may have already missed the window of opportunity! rates on the raise due to overwhelming demand!

i locked in a 20-year @ 2.75 with 0 pts on monday with my credit union.

The window has not closed so let's not sow the seeds of panic. There will almost certainly be another rate cut, perhaps two, between now and the end of the year. Also, folks should understand what it means when "rates go up". It doesn't always mean the rate literally has moved from 3.25% to 3.375% for example. Often times it means the cost of a particular rate may no longer be the same as it was yesterday or earlier in the day. And even if the rate has actually moved, an 1/8th or 2/8ths of a point will not materially change the monthly payment on a mortgage once amortized over 20 or 30 years. Further, the retail lending space is hyper-competitive so often times origination, fees or points are negotiable especially on the jumbo product if you're shopping rates with multiple institutions.

[KingOfJericho]

Originally Posted by TboneS54

Agreed. Pay your mortgage down faster if it's 1984 and you've got 12% rate, but it's not, were talking sub 4%. We'll be seeing 20-30% gains in the market like we did for several years in 2011-2014 or whatever it was.

That thinking fails to take into account that you chip away very little principal during the first decade of a mortgage. Barely 1/3rd of your payment goes toward principal, even less when you take into account the escrows. People are often shocked when they sell at how little they've paid off even a decade into their term. Housing is (generally) an appreciating asset, so it makes sense to pay down principal.