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I can't believe how low interest rates have gotten.

D

Doggiedog

Lifer
I just looked up for fun how much it would cost to refinance my mortgage.

I could switch from my 30 Year Fixed loan to a 15 Year Fixed loan for the same exact monthly payments.

This is incredible.
 
Originally posted by: Ameesh
what if you went 30 year -> new 30 year and made extra payments to the principal?
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15 year fixed interest rates are always 0.5% or more better than 30 year fixed rates.

 
Originally posted by: Doggiedog
Actually. I miscalculated. Forgot to add the escrow tax. Still. I can break even in less than a year.
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Have your lender quote you a 20 year fixed if they offer it. The rate should be only a little worse than the 15 year (maybe 0.25% higher), but (guessing from what you've described about your situation) the payment should actually be the same or slightly less than your current 30 year, including your escrows.

Check it out. It's one of my favorite loans to offer my refinance customers. Save 6-8 years off your mortgage with the same or even a little lower payment. If you intend to keep the home long enough to pay it off, your actual savings are your current P&I payment times the number of months you take off your mortgage. That can be a VERY big number.
 
Originally posted by: Jumpem
Vic, should someone right out of college look into a 15 or 30 year loan?
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Since my name is Vic I'd say 30 for most people. Interest rates are so low that the money saved by paying lower on a 30 than on a 15 could probably be put into better investments elsewhere, plus as ameesh alluded to you can always pay the same payment as if you had a 15, and have the comfort of knowing that if something bad happens you can pull expenses down to that 30 year payment.

 
Originally posted by: Skoorb
Originally posted by: Jumpem
Vic, should someone right out of college look into a 15 or 30 year loan?
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Since my name is Vic I'd say 30 for most people. Interest rates are so low that the money saved by paying lower on a 30 than on a 15 could probably be put into better investments elsewhere, plus as ameesh alluded to you can always pay the same payment as if you had a 15, and have the comfort of knowing that if something bad happens you can pull expenses down to that 30 year payment.
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LOL! Agreed 😀

The reason why I think people who refinance should get a shorter term is because (1) it reduces their life-of-the-loan costs while re-amortization to a 30 actually increases that, and (2) I feel that ideally everyone should aim to have their home paid off prior to retirement.

If you're fresh out of college, you've got a whole lifetime to work with. Get a nice house with an affordable payment on a 30.
 
so heres my situation.

i just bought a car at 3.9% for 5 years.

the monthly payments are a little less than 300 bucks a month.

i was thinking about giving as much as i can each month to pay it off quicker...is that a bad idea?

in total, after the car is paid off, interest will amount to only about 1500 bucks...
 
i bought my first house in 1992 and got 7.5% , which was very good, i hit a dip in rates back then

we just bought our second house and got 5.75% 🙂 i am happy
 
if you're fresh out of college you're probably going to change jobs another 4 times before you settle down. that could involve moving, and you have to be in a house for a few years before it makes financial sense.
 
Originally posted by: xospec1alk
so heres my situation.

i just bought a car at 3.9% for 5 years.

the monthly payments are a little less than 300 bucks a month.

i was thinking about giving as much as i can each month to pay it off quicker...is that a bad idea?

in total, after the car is paid off, interest will amount to only about 1500 bucks...
Click to expand...
Don't pay as much as you can, just pay a bit extra as you feel comfortable to (1) reduce your overall interest a little, and (2) to make sure that you're never "upside-down" in the car.
 
Originally posted by: ElFenix
if you're fresh out of college you're probably going to change jobs another 4 times before you settle down. that could involve moving, and you have to be in a house for a few years before it makes financial sense.
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Before what makes financial sense? And I don't really plan on moving out of the area. I love where I live and have grown up. I'm staying here or close by permanently.

 
yeah.. these rates are nice.. but they probably won't last for another year.. or it'll be up a little anyway. I reeaaally wish i was oout of college now.. I could lock those rates in....
 
Anybody know the answer to this?

I consolidated my student loans about 3 or 4 years ago into one loan. Can you still get it refinanced at the lower rate, even if you aren't consolidating? Thanks.
 
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