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!
