consider a mortgage refinance
Question: This got me to thinking. My situation is that I have a principal of about $35k, with about 8= years left (I’ve been paying an extra $50/month for the past 3= years onto the principal). My fixed rate is 7.375%, and this was a 15-year mortgage (I made a pretty big down payment, btw). The amount I borrowed was only $45k. So, can some of you here enlighten me some on this? I figured it’s better to get advice from ordinary consumers and homeowners than to start calling lenders. Heck, some of you are probably experts on this. Thanks to anyone who wants to give useful and accurate feedback. Should I consider looking into this?
Answer: 35K is a small amount. Mortgage brokers and such will not be interested, particularly for a no cost (no points, no fees) loan, since the money they make comes form a percent of the loan amount. You best bet would be a bank or an institution like ditech or eloan (no personal experience with the latter two). You have to figure out what your objective is. Is it to make a smaller payment, pay off sooner, or take money out. Assuming it is not the last option, let us run some numbers. At 45k and a 15 year loan @7.375% your payment is $413.97. Your current balance is $ 35k. If you make payemenst at 413.97+50= 463.97, you will payoff the loan in approx 102 payments (8.5 years). You may be able to get a loan for about 5.25% + a flat fee of $ 2000 (worst case). So your principal is $ 37k@ 5.25% whcih works out to a payment of $ 450.46 assuming you payoff in 8.5 years, You save $ 13.50 approx per month. If you continue to make the same payments of 463.97 you will payoff the loan in approx 98 payments , about 6 months earlier than your current payoff. If you extend the loan to a 15 year term then your payment will be $ 297.43 a savings of $ 166.54 per month.
Actual numbers will depend on the rate and costs that you can get. It is your move counselor!
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