done something but not sure

I refinanced my house. Purchased it in June 2010, 5.25% - 30 yr. just a little over 2 years in to it. Refinanced it today at 4%. I don't really trust too many people (Blake and Red are cool) but the new finance company says I'll save over 35K and my payment DID go down but I chose and will still continue to make my usual past monthly mortgage plus a little more. I really wasn't trying to save any money thru the month by refinancing but wanted to take advantage of the lower rate and turn that back into extra principal.

Think I did okay Reason I ask is because I had to re-do as another 30 yr deal and lost the 2 previously yrs on the original mortgage. I know I'm behind the 8 ball on this game cause of my age..................................... your input

15 years are below three percent here................

Without looking at a chart saving 1.25% interest is a large amount over 30 years. They should have been able to tell you exactly what you would save but I am sure it is well worth it. Did you put any extra down? If you keep making the larger payments that adds up over 30 years as well. You gotta love the whole mortgage process in the US with the availability of a 30 yr mortgage. In Canada you can get a longer mortgage but the rate is only fixed for several years (4-5) depending on your contract. You can't lock anything in for extended periods of time.

IDT-572 wrote:15 years are below three percent here................

A 15 year will really save you some money but you have to be able to afford the larger payment..

Any time you can lower the % rate you are getting ahead. Pretty good deal IMO. The more you can get paid on the principal the better off you are, and when you add the extra, make sure they know it is for principal only and not interest payment.

Just make sure if you pay it off early you still don't have to pay what it would cost for the whole trem you financed. Just say if you let it go for the whole 30 years and it cost you 124,000 you see where you can get ahead and pay it off in 20 years and you still wind up paying 124,000 even paying it off early.I have seen this happen it was to me I had 4.99% interest rate for 6 years had the money in hand to pay it off in 3 years went to pay it off and they told me my pay off I ask him that is the same if I just keep paying until my last payment.He said yes when you went with the low interest rate you have to pay all the interest charges just like if you was paying it full term even if you want to paying off early.He said I had not payed alot on it that I was paying the interest 1st after I had the interest payed off I started paying on the princable after that I said the hell with paying it off early.Now when I finance I ask about it.

Another option to save money on your mortgage will save you years off your loan is.My employer deposits 1/4 of my mortgage payment into my bank account each week.Then my bank makes a draw every 2 weeks for my monthly house payment. It will save you big money over the life of your term.

If short term rates carry a lower rate that is something to consider. You are beyond that now and it looks like you are moving up even though the time has been extended. That being said it is very important for you to slam as much extra into principal for the next 5 years. If you look at the principal reduction for the first 5 years of a 30 year note it is almost nothing. When you pay the note down in the first 5 years the rest of the time will pile on principal.
I've had two 30 year notes, one 15 year, and one 20 year and in every case I've paid them down quicker than the standard payment. At my age I will never have a note longer than 15 years.

If you want to play with this I got an Excel spreadsheet that you can mess around with. Send me a pm with your email and I'll send it to you.

Now on to the good stuff...
Are you going to the track sometime this year? I am trying to get my engine straightened out and make the Mustang day at Ubly in October.
That day when we were at Ubly and my trans smoked I also burned 2 pistons and didnt know it until 5 weeks ago. What an expensive day that was for me at about $3500 but not complaining. I'm going to Ubly next Saturday to watch Dale and a few other friends run.

redid ours a few years back went from 30 to 15 years seems the payment only went up a couple hundred bucks.

richter69 wrote:redid ours a few years back went from 30 to 15 years seems the payment only went up a couple hundred bucks.

Baller.......

no car payments frees up some coin...........

What are the penalties?
Most mortgages mature after 5 years, so you can always re-negotiate without penalties then.

I just bought a new home.(to me its new) our % rate is 3.75 for 30 years. I believe you did the right thing by refinancing only because you were 2 years into the loan!