I bought a home 2009. Paid $67,000 and got a interest rate of 5.5%. I have been paying down extra principal every month. Currently the loan is about $47,000 with 25 years left on the mortgage. By my calculations if I continue paying the same amount I am now I will continue gaining ground and have it paid in full October 2021 (about 7.5 more years). I will end up paying approx $59,000 in principal and interest over that time frame (I am only counting from today to the end of the loan).
I just called some mortgage/lending companies to see what I could get if I refinance. I get a very car salesman vibe from everyone in the industry that I talk to. They are more interested in throwing around monthly payment calculations, and total life time costs of the loan (which are flat out wrong btw*) than they are in actually telling me what the damn values i'm interested are (APR and closing costs).
The best APR I was given was 4.375% for a 10 year mortgage, which seems very high to me. That also comes with $2,382 in closing costs that will be rolled into the loan. And I will have to pay $420 out of pocket for an appraisal. I calculate out that I will end up paying about $59,000 and have approximately the same pay off date using these figures. The total interest paid will be a bit less because of the APR, but the principal will be higher because I am adding $2,383 right off the bat. I will be paying a little extra (on top of required payment) in this scenario in order to make the same monthly payment I am currently.
I have a few questions for the mustaches here.
1. Does 4.375% sound too high of an APR for me to qualify for? I was expecting lower. I have over 800 credit score with no black marks. The only other debt I have is about $8,000 on a car loan, and the only reason I have that is because I chose to invest my $8,000 car fund and take advantage of my credit unions 1.7% APR on the car loan. I figured (and still do) that I will come out ahead in the long run by doing that.
2. Does my math check out that I won't save any money by refinancing with those terms?
*This one just took my current monthly payment (including taxes and insurance) and multiplied it out by the number of months remaining on my mortgage to get a "total spent" value (which is inaccurate because the loan will be paid off way ahead of schedule). Then they did the math on a new 10 year mortgage and multiplied out the payment by the 10 year term to calculate a "total spent" to show me how much I could save by doing this option, while totally ignoring that one calculation factors in 15 additional years of taxes and insurance into the equation than the other. I don't even need to crunch the numbers in some of these cases to know their numbers are wildly inaccurate.
EDIT: for clarification purposes