 gcostanzo
Joined: 02 Nov 2009
Posts: 1
1.28 Dollars($)
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Posted: Mon Nov 02, 2009 8:22 am Post subject: refinancing
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have 2 properties. first has 133,000 balance, 6%, 25 year to go, $960 monthly payment. second has 50,000 balance 29 year to go, $350 month payment.
Shall I refi by combining into one 183,000 mortgage cash out, pay off the $50,000? i was quoted 5.25%, 1 point, $3000 closing costs? |
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jveenstra
Community Expert
Joined: 10 Nov 2008
Posts: 1256
Location: River Edge, New Jersey
264.15 Dollars($)
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Posted: Mon Nov 02, 2009 8:57 am Post subject: Refinance
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The answer depends on your game plan for the future.
If you pay $350 for 29 years and $960 for 25 years you will pay in total $409,800.
If you do a new mortgage at $187,830 (covering one point and costs) you will pay at 5.25% a total of $469,440 for the next 30 years. That is $60,000 more than you wil pay now.
You would be lowering your monthly payment by $276 a month to $1,034.28. If you save $276 a month for 25 years, you save $82,800. If you actually save that monthly you are ahead of the game by $13,800 at that point even earning no interest on the monthly savings. You would, of course, earn interest and be further ahead of the game.
Comparatively, you would still have another 4 years left on the second mortgage but you are still ahead of the game.
If you were to do a 20 year loan, your monthly payment would be $45 less a month than you pay now and over 20 years you would pay $303,763.
I would say, do it. Save the money monthly, or, do a 20 year loan that will force you to pay monthly, lower your payment from what it is now and save $100,000 over the pay outs of your present loan.
_________________
John Veenstra, Sr Mortgage Consultant
Approved Funding Corp
Licensed NJ NY CT PA
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