Consider a shorter loan term when refinancing


Consider a shorter loan term when refinancing
By Scott Rogers • July 6, 2012
I bet you thought rates were low on 30 year mortgages at 3.62%. How about a 15-year fixed rate mortgage at 2.89% -- now that is low! If you are refinancing your mortgage because you have a high current interest rate --- be sure to check to see what would happen if you reduced the term of the mortgage. Let's consider the scenario of someone who bought a $250,000 house ten years ago with 80% of the purchase price financed at 6%. Somehow, this homeowner has still not refinanced (suspend your disbelief) but now is finally considering it. Current Mortgage Payment (principal and interest only) = $1200 Option 1: Refinancing balance of $167,371 at 3.62% over 30 years. New Mortgage Payment = $763 Option 2: Refinancing balance of $167,371 at 2.89% over 15 years. New Mortgage Payment = $1147 So.....after having paid for 10 years, this homeowner can take their remaining 20 years of intended mortgage payments ($1200/m) and lower that payment to $1147/m all while paying off the mortgage in 15 years instead of 20 years! Opportunities abound given today's low (low) mortgage interest rates. Whether refinancing or buying, now is a great time to consider taking out a new mortgage and locking in your interest costs at all-time record lows. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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