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trawnik01 · Joined: 08 Jun 2009 Posts: 1 1.33 Dollars($)

I have a loan for 110,000 at 6.3% for 30 years. Within 2.5 years I paid that down to 80,000. I've been paying extra around 800 a month sometimes more. Is it worth to refinance to around 5% for 15 years? It costs around 1600 dollars to refinance.

robertsmith2005 · Joined: 22 May 2009 Posts: 338 -0.48 Dollars($)

general rule is 2% reduction in interest rate

consider following before calculating break even:

Refinancing costs
Prepayment penalty
Impact on taxation

jnoa · Posted: Mon Jun 08, 2009 9:46 am Post subject: advice

Overall you would have a total savings over the course of the loan, so if that is your goal then it might be advisable as long as the closing costs stay low. It depends on if you feel you can take on the new payment and if it is worth it in your eyes. You could also continue what you are doing and set up a bi weekly payment to help pay off the mortgage a little faster.

gmakerley · Posted: Mon Jun 08, 2009 12:55 pm Post subject:

agreed - if your payment on the new loan is reasonable, you'll be able to save based on that minimal amount of closing costs.

Realgeni · Joined: 13 Apr 2009 Posts: 1434 99.76 Dollars($)

trawnik01

Welcome to the forum.

Here is some simeple calcultio based on the data you have given. This does nto take any of your tax credit in to account and it could vary based on yoru current and future tax bracket.

$80,000/- at 6.3% for 15 years with out any extra payment will cost you $43861.65 in interest Payment

$80,000/- at 5% for 15 years with out any extra payment will cost you $33874.28 in Interest Payment.

If it is going to cost you only $1600/- refinace, then you are lookign at some good savings. But this does not take in to account the extra payment you are goign to make.

Good luck and feel free to ask

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