97BossHammer

Thinking about refinancing my house. In 2001 I did a 15 yr @ 6.5 %. Now I can do a 15 yr for 4.8% so I'd be dropping about 1.7%. Is it worth going through the hassle of it all. I think I'll be saving in the long run....but with all the closing costs, etc etc, I don't know if it's actually worth it. I've been told that if you can drop over 1% it's worth it.

LapseofReason

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US1 Fountain

iTrader: (1)

Personally, any time you can save money, it's worth it. Find out your closing cost That should be your answer.

We have refinanced 3x. Last time was just 4 months ago. Thinking about doing it again since rates have dropped another 3/4 % from our current. Gone from 30 to 15 to 10yrs. Payment is about the same. Figure if we do it one more time, the banks will pay us money each month!

Just for chits and grins, I used 100K. (No Taxes or insurance)

15 yrs@ 6.5%, $871/month, $56,800 interest paid over full loan term

[email protected]%, $780/month, $40,480 interest paid

Gotta consider on how long you plan on staying in this home also.

Von Bongo

Do it if you are planning to stay in the house any length of time, more than 12 months. Your closing costs, not including prepaids should be in the $1000 range. Does the lender that made you the original loan still service it? If so you can probably streamline it save on the closing costs. 4.875% is not a good rate based on our 15 year rates, we were at 4.625% today.

Since we service our loans most of our customers refi every 1/2 -3/4 percentage rate drop.

Von Bongo

I replied from home yesterday, now that I am at the office and have my calculator

6.5% = $8.71 per $1000 borrowed
4.875% = $7.84 per $1000 borrowed
You save $0.87 on every $1000 borrowed per month so if you owed $100,000 you would save $87 per month in your payment.

If it cost you $1000 to refi and you save $87 per month you break even in 11 months.

If you refi then keep paying the old payment amount and you will see even greater savings because of the faster amortization. This is comparing a 15 year loan to a 15 year loan, if you refi back to 15 years you will see a greater payemtn reduction because you have extended the time on your loan back to 15 years, that is why I suggest you continue to make the old payment amount on the new loan.

Von Bongo

Woops, soory about the rate quote, 4.875 is not a good rate we are at 4.625 on a 15 year..that is what I get for not looking at the rate sheet.

97BossHammer

4.6%, I'm gonna have to check that out. I was just looking at some of the rates on line and ran across that one. The Mortgage Co. that did it the first time is no longer in business so I'm either going to have to go through the bank or another mortgage co. Hmmm....breaking even at 11 months....I'll have to think this over a good bit.