In an effort to both save money on interest and lower our monthly mortgage payment, we have decided to consider refinancing our mortgage. I have spoken with several lenders and it looks like we can refinance our loan – and reduce or interest rate by more than a full percentage point.
When we purchased our home nearly two years ago, rates were already very low (historically speaking). We happy with our rate and figured that we would just stick with it, pay off our mortgage as quickly as possible, and be happy. However, since that time, rates have continued to drop – and are now at the point where, even if we have to pay a little in closing costs, the savings, over the life of the loan, will be rather substantial.
We are still crunching the numbers, trying to decide if we want to go back to a 15-year mortgage – or move to an even lower rate, on a 10-year. More than likely, we’ll go with the 15-year. With the rate reduction, even if we were to take the entire 15-year period to pay the loan off, we would still pay less interest than we would if we stayed with our current mortgage, and paid it off in 13 years.
Combining the lower rate with our aggressive payments, we should be able to hit our goal of owning our house – in less than 10 years.
I’ll let you guys know how the process is going, when and if we decide to move forward. Right now, all sings point to “yes”.