Would you refinance house in my situation?

[Anonymous]

We owe 350K with 4.875%, 30 year, in our 6th year.
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We would like to pay it off in 3-7 years.
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Would we save money on monthly interest if we refi to 15 or 10 year mortgage?

Can someone point me to a website where I can calculate this?

thanks!

[Anonymous]

Anonymous wrote:We owe 350K with 4.875%, 30 year, in our 6th year.
---------------------
We would like to pay it off in 3-7 years.
---------------------
Would we save money on monthly interest if we refi to 15 or 10 year mortgage?

Can someone point me to a website where I can calculate this?

thanks!

Yes, refi with PenFed 5/5 ARM, current rate is ~2.75%, 0 origination fee. You'll save a ton

Google is your friend - mortgage calculator, bankrate.com has decent one

[Anonymous]

Refinance to a 15 year mortgage, assuming the monthly payment is easily covered, then pay extra each month. You can always pay extra, but never less so you have to make sure you are very comfortable with the new monthly payment

[Anonymous]

Anonymous wrote:Refinance to a 15 year mortgage, assuming the monthly payment is easily covered, then pay extra each month. You can always pay extra, but never less so you have to make sure you are very comfortable with the new monthly payment

5/5 ARM is much better in OPS position - rates are lower, so lower payments for first 5 years
If she pays extra - chances are - it will be paid off in 5 years
If not - she won't be stuck with higher mandatory payments.
Just my 0.02

[Anonymous]

Probably, I'm very risk averse and would worry about 5 years from now.

[Anonymous]

Anonymous wrote:Probably, I'm very risk averse and would worry about 5 years from now.

ARM 5/5 resets every 5 years, not every year as traditional 5/1 - 7/1 ARMs

OP right now has 4.875,
Worth case scenario - rate will go up to 4.75% years 6-10, when bulk of the mortgage will be paid of by extra payments
OP plans to paid off in 7-10 years, so chances are - there will be no second %% reset for years 11-15.
No-brainer for me.

[Anonymous]

If your rate begins with a four, you should be refinancing now. Whether you go with fixed or adjustable, 15-year or another 30-year again, is up to you. But if you're at 4.875, you should absolutely be refinancing now.

When we refinanced in 2012, we got a 3.5% and kept paying The same amount as we had with the 5 5/8 that we had before. Essentially turns it into a 15-year but keeps flexibility if we need it.

[Anonymous]

OK, we have a similar situation to OP's except for the part about being able to pay off the mortgage in 5 years. 30 year mortgage that we've had since 2011 with the interest rate at 4.9 percent. So the consensus is: refinance? Into a fixed rate, right?

Can someone recommend a good mortgage broker? And can you get a 25 year mortgage? I don't want a 30 year, it feels like losing the last 4 years of payments.

[Anonymous]

Check with apex loans. In a similar situation, we refied from a 30 to a 20 year loan and kept nearly the same payment due to the lower interest rate.

[Anonymous]

Anonymous wrote:Refinance to a 15 year mortgage, assuming the monthly payment is easily covered, then pay extra each month. You can always pay extra, but never less so you have to make sure you are very comfortable with the new monthly payment

This is what we did.

[Anonymous]

Yes, but refinance to whatever has the lowest rate for at least 7 years. For you that is probably a 10 year fixed term, although possibly a 7/1 arm.

[Anonymous]

Do you realistically think you can pay this off in 3-7 years? If so you will want to factor in how loans are structured. You always pay more interest in the beginning, and over time the balance of interest to principal shifts. So if you refinance now and pay the loan off in 3 years, you could end up paying more interest despite the higher rate.

What I would do is run an amortization table - to do this you need the original loan amount and start date.

http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx

See how much interest you are paying monthly now and compare the interest you would pay over 3-7 years longer of the current loan versus the interest you would pay over that same period if you refi.

[Anonymous]

Anonymous wrote:Do you realistically think you can pay this off in 3-7 years? If so you will want to factor in how loans are structured. You always pay more interest in the beginning, and over time the balance of interest to principal shifts. So if you refinance now and pay the loan off in 3 years, you could end up paying more interest despite the higher rate.

What I would do is run an amortization table - to do this you need the original loan amount and start date.

http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx

See how much interest you are paying monthly now and compare the interest you would pay over 3-7 years longer of the current loan versus the interest you would pay over that same period if you refi.

BS
Absolute $$ of interest OP pays each month is always loan amount * interest rate
so, lower the rate - less interest will be paid.
Only reason people pay more interest after refinance for lower rate - if the length of the loan is increased, with OP doesn't plan to do anyway.

[Anonymous]

We decided to refi to 15 year fixed.

Anyone have any recs with who to go with?

OP here

[Anonymous]

We didn't bother and are at the same rate, 5 years in. We are set to pay our loan off in 4 more years. we are so heavily paying down principal right now that the savings are really not worth the hassle. FWIW, our principal is not that high (for DC at least).