Footballjoe Posted January 23, 2009 Share Posted January 23, 2009 I heard it's not wise to refi until the rate is 2 percentage pts lower than what you're currently paying? Guess that means I'll be waiting for 3.875% I think the 2% thing was something of the past. I think you need to weigh how long it will take to recover the cost. Also it depends on how long you plan on staying in the house. Also, if you have other debts that you want to incorporate into the loan. Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 23, 2009 Author Share Posted January 23, 2009 I heard it's not wise to refi until the rate is 2 percentage pts lower than what you're currently paying? Guess that means I'll be waiting for 3.875% A couple factors to weigh. 1) How long have you had your existing mortgage 2) How long do you plan on staying in the home 3) Your current payoff amount For instance, If you owe 400K and your current rate is 6% your P/I would be $2,398 per month. If you refinance to 5% with closing cost and prepaids of 4K, your new loan amount would be 404K. Your new P/I would be $2,168 per month, a savings of $230 per month. Most people would jump at saving $230 per month if they have only been in the home for a few years. If you owe 150K at 6% your P/I would be $899. Refinancing to 5% would lower the P/I to $816 per month, only a savings of $74 per month. The 1% or 2% rule is only relative to how much someone owes at the time of the refinance. Quote Link to comment Share on other sites More sharing options...
sunysteelfly76 Posted January 24, 2009 Share Posted January 24, 2009 I had about 23 years left at 6.25. Locked in at 4.625 for 15 years today. Quote Link to comment Share on other sites More sharing options...
whomper Posted January 24, 2009 Share Posted January 24, 2009 Can someone in the know explain mortgage modifications please ? Quote Link to comment Share on other sites More sharing options...
Footballjoe Posted February 3, 2009 Share Posted February 3, 2009 Lets say you have a payment of $1200.00 a month P & I. You pay (1) extra payment a year ($1200). I was told it would take (7) yrs off the back of the loan. I assume you could add $100 per month to your mortgage payment and it would do about the same thing. Now, what if you added $200 a month how soon would you pay off the mortgage? Also, what if you add $300? Quote Link to comment Share on other sites More sharing options...
muck Posted February 3, 2009 Share Posted February 3, 2009 Lets say you have a payment of $1200.00 a month P & I. You pay (1) extra payment a year ($1200). I was told it would take (7) yrs off the back of the loan. I assume you could add $100 per month to your mortgage payment and it would do about the same thing. Now, what if you added $200 a month how soon would you pay off the mortgage? Also, what if you add $300? God made excel so you could answer this question yourself. I cannot answer it because I do not know your interest rate, your starting balance, your insurance costs, etc. Quote Link to comment Share on other sites More sharing options...
I Like Soup Posted February 3, 2009 Share Posted February 3, 2009 Lets say you have a payment of $1200.00 a month P & I. You pay (1) extra payment a year ($1200). I was told it would take (7) yrs off the back of the loan. I assume you could add $100 per month to your mortgage payment and it would do about the same thing. Now, what if you added $200 a month how soon would you pay off the mortgage? Also, what if you add $300? When I was told that, I put in the extra payment a year in to my amortization spreadsheet and it actually worked out to about 5.5 years early that the loan was paid off, not 7. I guess that could vary slightly depending on your numbers. If anyone wants the spreadsheet I use, send me your email address and I'll hook you up. Quote Link to comment Share on other sites More sharing options...
Footballjoe Posted February 3, 2009 Share Posted February 3, 2009 When I was told that, I put in the extra payment a year in to my amortization spreadsheet and it actually worked out to about 5.5 years early that the loan was paid off, not 7. I guess that could vary slightly depending on your numbers. If anyone wants the spreadsheet I use, send me your email address and I'll hook you up. I will PM my e mail address. I was just using the $1200 as an example since it would not take much math to figure out 12 equal payments. I am intersted to see what it would take to cut down a new mortage by adding extra $$$$. Thanks Quote Link to comment Share on other sites More sharing options...
I Like Soup Posted February 3, 2009 Share Posted February 3, 2009 I will PM my e mail address. I was just using the $1200 as an example since it would not take much math to figure out 12 equal payments. I am intersted to see what it would take to cut down a new mortage by adding extra $$$$. Thanks Done! Quote Link to comment Share on other sites More sharing options...
jaxfactor Posted February 3, 2009 Share Posted February 3, 2009 I'm in the middle of a refinance myself. I had 2 mortgages totalling about 3/4 of the value of my home. I got a little cash back to pay some minor bills. I just got out of chapter 13 a year and a half ago, but got a 5.25 fixed on a 30-year. I was tempted to go the 15 year route which would still have saved me some $, but I have a plan. If I make one extra payment a year, I can bring that 30 down to 23. I can do that right off the bat with my tax return. Then if I make another extra payment(all towards the principle, of course) during the course of the year, it comes down to right around 15 years. As much as I wanted to be retired in 10 years, it doesn't look too good anyway, so I'll end up working another 15 and hopefully have my mortgage paid off. The best thing about this, besides saving money, is that I still have 25% equity in my house. And there are no early payoff fees. Quote Link to comment Share on other sites More sharing options...
Footballjoe Posted February 3, 2009 Share Posted February 3, 2009 (edited) When I was told that, I put in the extra payment a year in to my amortization spreadsheet and it actually worked out to about 5.5 years early that the loan was paid off, not 7. I guess that could vary slightly depending on your numbers. If anyone wants the spreadsheet I use, send me your email address and I'll hook you up. appreciate the spreadsheet. It worked great. here is what i came up with: Using $200,000 at 5% extra $100 pays off 62 months early extra $200pays off 104 months early extra $300 pays off135 months early Using $160,000 at 5% extra $100 pays off 74 months early extra $200 pays off 121 months early extra $300 pays off 154 months early Edited February 3, 2009 by Footballjoe Quote Link to comment Share on other sites More sharing options...
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