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mehrhardt5 · Joined: 23 Jul 2010 Posts: 1 1.35 Dollars($)

Current: 27 yrs left on 30 yr fixed at 6.625% & we pay $200/mo extra on a $773.18 P&I note. Home value $162K, owe $109,800. Ficos are 736/781. Offer: 30 yrs 5%, so not 2 points difference. We would be depleting large part of savings for closing. I say recoup that by lessening our non matched 401K deposits for 6 mo. We are disciplined and would go back to that for sure. Husband thinks not worth it. Plan on being in this home for life.
Thanks!

netherton · Posted: Tue Jul 27, 2010 10:36 am Post subject:

Yes you should refinance but that 5% offer is ridiculously high. Should easily be able get a rate in the high 4% range.

Posted: Tue Jul 27, 2010 11:14 am Post subject:

We got another quote of 4.5 for 30 years, and closing will only be about $2772, not including escrow - but we'll get most of that back from the current mortgage.
After computing it all, we found that because we will be using the Dave Ramsey "snowball" system of attacking the debt, we'll only save 1.5 years off the total life of the mortgage by refinancing. To him, this is not enough reason to spend $3K. I say it is, because if one of us loses our job, we'll be saving $217/month. That could be huge when someone is out of work! He ju

jveenstra · Posted: Tue Jul 27, 2010 2:15 pm Post subject: Refinance

If you continue to pay $200 extra per month by paying $973.18 in P&I, you pay off in 178 months, so you have 14.83 years left at the current payment.

If you refinance $109,800 at 4.50%, your required monthly payment is $217 a month less than the present required monthly payment.

If you voluntarily pay the same as you do now which is $973.18 which includes the extra $200 you pay now, you would be paying extra monthly an amount of $416.84. That would pay off in 147 months.

Comparing apples to apples, that being you're paying same as you do now after refinancing, you save 31 payments of $973.18 monthly which totals $30,168. Minus the $3,000 in costs you are paying by cash, you save about $27,000 and mortgage is gone 31 months sooner and if any problems the required payment is $556.34.

Not sure where you got saving 1.5 years off the mortgage.

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