A mortgage is about the lowest cost of interest-bearing capital out there - you should easily be able to outperform your interest rate.
Meaning it would be smarter in the long run to take your surplus money and invest it.
Or go with a mixed approach and make a few extra principal payments per year and invest the other 75% of it.
But not sure why you'd be in a hurry to pay back cheap money.
Meaning it would be smarter in the long run to take your surplus money and invest it.
Or go with a mixed approach and make a few extra principal payments per year and invest the other 75% of it.
But not sure why you'd be in a hurry to pay back cheap money.
Same documents as the first time.
Payment increase amount? Lets say on a 100k loan at 5%. Your payment would be $537/mo. Switch to a 15 year at a 3.5% rate (about what they are now depending on credit) your payment would be $714/mo
If you have a 30 year mortgage now you could pay 1 extra payment a year and knock 8 years off your loan.
Lets say you pay $1000/mo now including taxes and insurance. If you switched to a 15 year loan you would save 1k/mo multiplied by 15 years =180 months. So, a savings of 180k!!! Crazy huh
Payment increase amount? Lets say on a 100k loan at 5%. Your payment would be $537/mo. Switch to a 15 year at a 3.5% rate (about what they are now depending on credit) your payment would be $714/mo
If you have a 30 year mortgage now you could pay 1 extra payment a year and knock 8 years off your loan.
Lets say you pay $1000/mo now including taxes and insurance. If you switched to a 15 year loan you would save 1k/mo multiplied by 15 years =180 months. So, a savings of 180k!!! Crazy huh
I've done it.
The process is basically the same as the initial loan. They are essentially end one load and starting a new one.
I did my refi with a different bank as well, so it was exactly the same as getting a fresh loan.
I had a $120k loan. @30 years it was $599/month. After the refi @15 years it went up to $826/month.
Forgive me but I don't recall the interest rates.
I've sold since then, but it would have saved me about 50k over the life of the loan.
If you have the cash, do it.
The process is basically the same as the initial loan. They are essentially end one load and starting a new one.
I did my refi with a different bank as well, so it was exactly the same as getting a fresh loan.
I had a $120k loan. @30 years it was $599/month. After the refi @15 years it went up to $826/month.
Forgive me but I don't recall the interest rates.
I've sold since then, but it would have saved me about 50k over the life of the loan.
If you have the cash, do it.
I have been thinking of doing the same thing. Currently have just been making extra principal payments each month.
I do have a question though that maybe one of you has an answer to. Currently I do pay PMI insurance. If i was to refi to a 15 or even another 30 year loan could I get my house re appraised and knock that PMI payment off? Also would the increased appraisal then raise my taxes because of the refi?
I do have a question though that maybe one of you has an answer to. Currently I do pay PMI insurance. If i was to refi to a 15 or even another 30 year loan could I get my house re appraised and knock that PMI payment off? Also would the increased appraisal then raise my taxes because of the refi?
Google bret whissel amortiation, play with this calculator and print out the full amortization schedules. You will QUICKLY hate your 30 year mortgage. The 15 year will cost very little more, lower interest rate, and pay A LOT LESS over life of loan.
Things to consider;
Your current home, in ideal world when would you like to sell it to upgrade? Add a year or two to this and see what you will paid on in the house, and money wasted in interest. I assume you are fairly young and do anticipate upgrading your home, whether that is because of family growth or just a little nicer lifestyle.
Me personally, after doing what I've stated to you, see NO reason for a 30 year mortgage. They are cash cows for banks. If you really sit down and look at all the numbers assuming you are young, a 15 year is a much better way to go.
By the way, if you are refi, it will cost you some money, but a bank can put that in your loan if you don't want to bring it too closing. 150k refi is the neighborhood of 2-4k.
Things to consider;
Your current home, in ideal world when would you like to sell it to upgrade? Add a year or two to this and see what you will paid on in the house, and money wasted in interest. I assume you are fairly young and do anticipate upgrading your home, whether that is because of family growth or just a little nicer lifestyle.
Me personally, after doing what I've stated to you, see NO reason for a 30 year mortgage. They are cash cows for banks. If you really sit down and look at all the numbers assuming you are young, a 15 year is a much better way to go.
By the way, if you are refi, it will cost you some money, but a bank can put that in your loan if you don't want to bring it too closing. 150k refi is the neighborhood of 2-4k.
Yea
you don't even need a new loan . If you have 20% equity and are still paying pmi you giving money away
There is a guy that advertizes big down here in my neck of the woods and he claims that if you do a refi through him that he will pay all of the closing cost. Now I don't know shit about the mortgage industry but he claims that since his company is a loan servicer that he makes .25% on the loan while most companies just pass the mortgage on to someone else after closing. So basically the more loans he closes the more he makes in the end. Is this something that could be legit? I actually do know someone that did a refi through them and said they did in fact pay the closing cost, but i'm always one of those if it sounds to good to be true kind of guys.
Yeah i get that concept of the 80% LTV thing. Just wanted to make sure that an appraisal would satify the bank enough to drop the PMI. I have no question that the appraisal would come in high enough at this point and from what I understand my taxes would then go up to the new appraisal amount but honestly where I live taxes are very small and I couldn't see them going up very much, I mean my property taxes for the year were $719 or $59 a month for my house. Even if they went up $25 or so it's still better then paying that PMI
Same exact process. 2-3% is a good estimate for closin costs. If you want to escrow taxes and Hoi keep in mind you will need to fund the acct.
What's your current product? 30 yr fixed? Bourn probably knows better than me but rates were recently at a 5yr low and the rate on a 15 will be less than on a 30. I would recommend googling amortization scheduled and finding out what the breakeven is. In regards to pmi at 80% you can call your lender to have it removed. At 78% it will automatically fall off but I'm not sure ig govt loans are the same.
What's your current product? 30 yr fixed? Bourn probably knows better than me but rates were recently at a 5yr low and the rate on a 15 will be less than on a 30. I would recommend googling amortization scheduled and finding out what the breakeven is. In regards to pmi at 80% you can call your lender to have it removed. At 78% it will automatically fall off but I'm not sure ig govt loans are the same.
He is just hiding that cost somewhere. I personally hate when people "include" things unless I can actually see where they are truly giving up a profit. For instances, you can buy points or up an origination fee (which are tax deductions) and ask your lender to pay closing cost (which aren't tax deductions). SO you could play a small tax gain there in the year you refi or purchase the new home.
Mortgages guys operate on a 1.5-3% profit generally, they aim for 3 and pray like hell they clear 2 at the end of the deal, so 150k loan they usually go into it knowing they can blow 1500 if it gets you to borrow through them.
Closing cost are not always rolled in, people have the option to pay them at closing with a check or to roll them in which then you have interest over the life of the loan for. I personally like the previously mentioned buying points/raising orig fee to pay for closing and then taking the tax deduction at the end of the year.
Without getting to nosey, are you close to 80% without the appraisal? The appraisal is going to cost you 300-600 dollars. Then yes your prop taxes are going to go up. SO it might be beneficial to figure out how much you would left in PMI to pay out (as i assume your pMI is 20-50 a month) so if in 5 months your pmi drops off already (or you can request it get off at 80% instead of waiting on the bank at 78%) then you actually net out much better.
