Author Topic: Should I refinance?  (Read 285 times)

bradspartan

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Should I refinance?
« on: August 26, 2019, 09:54:28 AM »
Hello there - first poster, looking for some simple advice.  I'm pretty sure this is a no-brainer, but I wanted to check with you all before setting the wheels in motion.  See my scenario below:

Current Mortgage
Original Amount: $164,000
Outstanding Principal: $160,879
Interest Rate: 4.54%
Term: 30 Years (Currently at 28 years 11 months in)
House Appraisal: $173,100

Mortgage Refinance
Amount: $160,879
Int Rate: 3.74%
Term: 30 years
Closing Costs: $0.00
House Appraisal: Let's assume this is the same, although, the house could likely net upwards of $190k on the open market.

Assumption
Any amount saved on the monthly payment (via reduction in interest rate) will be dropped right back onto the principal.  Aka - with this, the monthly payment will go down roughly $100 a month and I plan on dropping the same monthly payment in each month.

With our current focus on paying off my wife's student loans, I think this is a win win.  As we get to make the current payment go towards more principal each month.  However; I just wanted to check and make sure as for some reason, going back to the 30 years is giving me some hesitation.  I prefer not to drop it to say... a 25 year, to have the flexibility in an adverse event to have the lower payment flexibility.

Am I right in that this is a good move?  Mortgage Refinance calculators are confusing me with this scenario.

Let me know your thoughts, thanks!
« Last Edit: August 26, 2019, 09:56:32 AM by bradspartan »

Another Reader

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Re: Should I refinance?
« Reply #1 on: August 26, 2019, 10:06:59 AM »
I would shop rate and terms.  My cousin is getting a no cost 30 year conforming fixed refi at 3.49 percent and I suspect you can do as well or better.