We got a call from our mortgage banker. They must be trying to drum up business!
We had contacted him earlier this year about refinancing our loan to a lower rate, but none of the deals made sense with the closing costs. We're planning to have the loan paid off within 5 years, so the math wasn't really worth the hassle.
Anyway, they came up with a new round of potential offers.
Here is what he sent.
Mortgages:
7 YEAR FIXED @ 4.29 %
Monthly payment $813.02
$389.00 closing costs.
5 YEAR FIXED @ 4.29 %
Monthly payment $1,092.51
Interest-only HOME EQUITY LINE OF CREDIT
@3.24% (variable rate)
with interest payment of $159.04
None of these seem great to me or worth the hassle. I'm hazy on the details. Any thoughts?
We owe about $58k, our rate is 4.85 percent, and our payment with escrow is about $1700, with about $1200 o f that to interest and principal.
Mortgage options
September 30th, 2013 at 09:08 pm
September 30th, 2013 at 09:24 pm 1380576241
September 30th, 2013 at 09:32 pm 1380576729
I think they do make you pay back some of the closing costs if you pay in full during the first 36 months.
September 30th, 2013 at 10:48 pm 1380581310
September 30th, 2013 at 10:53 pm 1380581637
September 30th, 2013 at 11:34 pm 1380584048
A 58k debt @ 2.75% will be paid in full in 60 months with payments of $1035.75.
A 58k debt @ 2.75% will be paid in full in 54 months with payments of $1184.44.
Your rate now is not horrible, and you are paying down so quickly that you aren't paying a ton of interest in the first place, so there is only so much to reduce. Still, every bit helps.
The interest rate would be a reduction of 2.1%. So the first month, you'd save $58k x .021 / 12 = $101.50. The second month your balance would be a bit less, so you would save a bit less.
September 30th, 2013 at 11:41 pm 1380584518