Author Topic: Should I do this refi now that rates dropped?  (Read 1049 times)

Cashflow

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Should I do this refi now that rates dropped?
« on: March 09, 2020, 11:32:09 AM »
Current VA Loan
207,395.35 current balance
1018.85 PI
1,367.13 PITI
Interest Rate 3.750
02/23/2017 closing date


Proposed Streamlined VA loan
30 Yr Fixed VA Streamline
PMT PI 880.00
Int 2.875
APR
New loan balance estimated total 212,000
Bank fee 2400
Title cost 1200


I assume new loan APR will come in around 3% or so and don't plan on paying off home early at these rates. But I will be losing 3 years of paydown saving $80.48 per payment. I tried several online calculators but did not feel confident in them.
 
Will the new loan save me interest and make up for losing 3 years pay down? Advice is wanted.
« Last Edit: March 09, 2020, 01:51:55 PM by Cashflow »

zolotiyeruki

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Re: Should I do this refi now that rates dropped?
« Reply #1 on: March 10, 2020, 08:00:58 AM »
If you're planning to stay in that home more than a couple years, then refinancing makes sense.  You'd be saving about $2k per year on interest.

If you're concerned about losing 3 years of paydown, you're right--when all is said and done, you're basically starting your mortgage over.  You're currently paying off about $370/mo of interest, and you've paid off maybe $13k total since you started.  You're giving up about half that ($5k ish) in closing costs and such.  If you're saving $2k in interest per year, though, you'll make that back in 2.5 years, and then continue to save $2k per year (after taxes!  woohoo!) from then on.