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”.
ncn, run the numbers by adding the closing cost payment to your existing loan as a principle only payment. Sometimes, it just isn’t worth the hassle, if you pay the $2000 closing costs up front and don’t refinance, making larger or some other better payment scheme.
triple-e, we may be refinancing with the same company, and should be able to avoid most costs… I will definitely run the numbers – great advice!
-NCN
Thanks for posting, we haven’t owned a home before and this is good to know. I too want to have a 15 year mortgage but first I have a feeling that I need to follow your debt free program first. What do you think?
If you are refinancing, you might want to look at your current mortgage company. I checked with other companies first when we decided to refinance and found some pretty good deals. Just to give them a chance, I called my current company and am sure glad that I did.
We received a better rate than the other companies, no closing costs and we were able to do the whole closing online.
Thank you for this post, it is good advice, i’ll be using it one day.
Your article is good but practical is important.Thanks for sharing such a use full post.
I’m close to buying my first condo so this was great information to read. Thanks for the tips and things to think about.
Nice article.I am completely agree with your ideas.Thanks for sharing.
Now is the time to do it. Rates continue to drop and if you are planning to retire anytime soon securing a 30 yr fixed now can certainly help the cause.
Nice blog .Sharing the information with good choice of words can be really very effective and you did it.Thanks for sharing.
Thanks for the information. I am currently wanting to refinance to consolidate on some credit card debt. I think that it is the smartest thing that you can do if you are able to. Not only are you paying a lower interest rate but you get rid of the credit cards at 21+ % apr’s.