Reply to trying to advise friend -- is it wise to refinance to a 15-year mortgage?

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Reply to "trying to advise friend -- is it wise to refinance to a 15-year mortgage?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]What does it mean they are "nervous" about the increased payment? If it will stretch them or even come close to stretching them, then I would just look for a refi that will let them drop PMI.  If it won't stretch them then I would do it to drop PMI and drop the interest rate by a percent.[/quote]

It won't stretch them.  They can handle it.  Their concern is that they are a two-income household, but they like to keep monthly expenses down as low as possible so that if they ever (through some unforeseen circumstance) have to get by on one income, they can manage for a short period of time without depleting their savings.  I think that is what makes them nervous.

But that is also a reason why having the house paid off by 55 would be good: they'd be in a good position then because it would significantly reduce their monthly expenses at a time in life where the chance of health issues and stuff increases.

[/quote]

I think this is a good point - as you age the chance of protracted periods of unemployment and illness increase.[/quote]

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