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Hugh R Hugh R is offline
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Join Date: May 2003
Location: southern California
Posts: 26,964
Mortgage Re-Fi analysis

My current mortgage is 4.625% APR with 7 years left. My broker can get me a 3.75% for ten years, which I would make extra payments to keep it at 7 years (when I "retire"). Looking at an amortization calculator like this one Mortgage calculator - Interest.com

If I paid it off in the 10 years I'd pay way too much interest. It would be better to keep my current loan. Basically, I'd keep the same payments and put the "extra" from lower monthly payments into additional payments. I'll shorten the loan by six months, and save about $10,000 in interest. The Re-Fi will cost me about $1,000 for appraisal, loan docs, all that crap.

Bottom line, if you Re-Fi, don't go for another 15, 20 or 30 year loan, the interest you pay up front, go for another loan with the same number of years, or less as your last loan. In the beginning of loans, you pay mostly interest and at the end mostly principal.
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Last edited by Hugh R; 07-28-2010 at 08:29 PM..
Old 07-28-2010, 08:27 PM
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