Looking to refinance my house to 15yr need some suggestions

Is it actually worth refinancing a $51k mortgage? I'm guessing the fees would be kind of a lot and any credit that you could get to offset them wouldn't be worth it because the balance is so low. What is your interest rate currently at?

Depends on the current rate your paying, how much you'd have for a down payment, etc.

Fire up an amortization schedule online using the various figures and you'll see the savings right before your eyes.

Check bankrate.com for lenders and don't forget local CU's!

Quote from dtmcnamara : To make a long story short I owe $51,000 left on my house and its valued at $85-95,000. I have owned it for almost 3 years, but when I purchased it I did a 30yr fixed mortgage to keep the payments down while in school. I will be graduating soon and I want to refinance now that rates are down and move to a 15yr or possibly a 10yr payment to get things done with. Just looking for suggestions on companies to look into. Location is Dacula, GA 30019 if needed Thanks in advance

What is the interest rate on that 30 year fixed?

interest rate is %5 and thats why I want to refinance. I dont want to pull any money out, just lock in a lower interest rate and get it paid off faster

Quote from dtmcnamara : interest rate is %5 and thats why I want to refinance. I dont want to pull any money out, just lock in a lower interest rate and get it paid off faster

Check out www.aimloan.com, www.amerisave.com, and www.provident.com

Put in your info and see what rates/fees they offer you.

I have worked with the first two and had a good experience. Have heard others here had a positive experience with the last one.

The thing though is interest on a $50k at 5% is what, $2,500/yr. Even if you get it at 3% it's still $1,500 so you'll save $1k. I'm guessing you don't itemize your taxes so you realistically save the full $1k (instead of less because of the tax effect). If it costs you $3k to refi in fees it'll take you 3 years to recoup your costs. It definitely can help you out if you keep the house in the long run but you need to figure what you're gonna save per year, what it's gonna cost you, and how long you plan to keep it to realize how much benefit there is to it.

Now, if you had a $500k loan at 5% I'd say HECK YA, REFI NOW as the savings would be quickly realized.

I guess I need to see how much longer it will realistically take for me to pay off the house. I do not plan on selling the house because of the insanely low mortgage. I would rather rent it out, or even just sit on it and wait till the value goes up more.

Thanks for the information everyone.

I wouldn't advise you to Re-Fi this mortgage into a 15 year. The interest rate is already low, and assuming your purchase price was $70k, your monthly payments are only about $375 a month. Holding a 30 year mortgage is essentially a hedge against inflation and the US dollar. If rampant inflation sets in, you will be paying off a house for almost nothing in today's dollars!

$51k is a car payment, not a mortgage! You could pay it off in under 5 years. Wish I was in that boat.

Might not be worth it to re-fi at the end of the day since your rate is really not that high to begin with. Have you thought about just paying more every month and applying the difference directly to principle? This will reduce your principle balance, interest paid over the life of the mortgage and # of years left as well.

It maybe difficult to refinance, since you have high closing cost refinance (closing fees vs mortgage amount) not a lot of companies work with high closing cost refinance, since this is a red flag for auditors.

You can add extra payment every month to pay it sooner or starts making biweekly ½ payments in this case you are making 13 full payments in year

With extra payments, if you have cash you can add more, if you don’t you just pay the monthly payment.

Quote from dealgate : $51k is a car payment, not a mortgage! You could pay it off in under 5 years.

LOL
Maybe in your world.

Research the rates and fees in your area. You may actually want to stick with a 30 year mortgage depending on the rates you find and how comfortable you are with other investments. Mortgage rates are low, simple as that. While you of course ultimately save money in the long run by paying off your mortgage in a shorter amount of time, having a 30 year mortgage allows you smaller payments. This means that you (relatively) have extra income which could be used to generate money. Invest that money in the stock market or some other investment and you'll likely come out far ahead in the long run. However, this requires you to be comfortable with investments. Don't forget -- you also get some tax breaks on the interest payments.

And as others have said, if closing fees are high, you probably don't want to refinance at all.

Quote from dude2000 : It maybe difficult to refinance, since you have high closing cost refinance (closing fees vs mortgage amount) not a lot of companies work with high closing cost refinance, since this is a red flag for auditors. You can add extra payment every month to pay it sooner or starts making biweekly ½ payments in this case you are making 13 full payments in year With extra payments, if you have cash you can add more, if you don’t you just pay the monthly payment.

I agree with this comment. Most lenders have a minimum loan amount due to the high cost guidelines and those who will do them have significant pricing add ons.

Prepay the best you can and enjoy the interest write off (while we still have it).

-Adam
Old Hippy & Mortgage Pro