Question

For those of you that have refinanced recently at low interest rates, are you refinancing for 30 years or shorter? With all the low rates people are talking about, I decided to talk to a mortgage broker about options. It didn't seem like we would get a better rate for 30 years as he was really pushing for us to do a 15 or 20 year mortgage.  

Answer 1

We close tomorrow on a 20 year from a 30 year. We are saving over $150, 000 in interest and cutting 7 years off. It is so worth it. Our payment is less than $100 more.  

Comments

@earthquake3 wow, that’s great! Thanks for sharing.  

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@earthquake3 that is absolutely amazing

Answer 2

30 yr rate is ok. 20 yr etc is better however you have to look at what you can afford as well. Also, to look at closing cost. The way to calculate is take all the rates and payments. Subtract the difference and see how many yrs it would take. To determine if you can recoup those cost. But if you feel more comfortable w a payment at 30, then you have to look at all variables. 20 yr rate right now is great. I vote 20 yr if you can afford it.  

Comments

@bank74 thanks for this explanation Lisa!  

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@beare I'd go w a 20 yr. Rates are amazing. 30 yr rate isnt that attractive. It's just okay

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Have the broker do an amortization calculator for you

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@bank74 that’s what I was thinking. I looked up rates and they look close to what we already have. But with the rates others have shared, I was wondering if I was missing something.  

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@beare depends who you go w. Credit unions are great. I like them a lot. Just all depends what you are looking for. I know 3. 5 weeks ago, there were ones at 2. 9%. And 2. 875% it was amazing. Just depends on the lender and what they offer.  

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@beare they might have been locked at a different time period

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Ive noticed that the smaller your balance, the slightly higher the rate. For example, the rate on a $130, 000 vs $115, 000 is slightly higher. So if you’ve paid down your balance into the next bracket, the rate might be slightly higher.  

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@bank74 what is considered amazing for 20 years? I just looked up a bunch of rates online and didn’t see anything less than 3. 25%. We’re at 3. 75% now so 3. 25% doesn’t really seem worth it.  

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Never mind, I just saw you already answered this above. Just saw it! Thanks hun

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@meggy Interesting! This may be part of the reason for the higher rates then.  

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@beare if they can get you 3. 25%, it really matters what the goal is. If the goal is a straight refi for lower rate and payment. Or if you are paying off credit card debt. Everyone has a different reason. You can even put in an amortization calculator- if you put extra towards it each month- it can even tell you the break down in interest and how you can pay it faster than 20 yrs. It is amazing tool.  

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@meggy . yes it’s so the bank can still make some money. it usually goes down around 150k

Answer 3

I personally don’t like extended the time paid on my house. It just prolongs paying it off and paying a ton of interest. When we moved, we had about 17 yrs left on our old house so we did a 15 yr mortgage on this house. Recently have been looking at the possibility of doing a 10 yr refinance. just hate all the interest paid over 30 yrs so no way i want to pay more

Comments

@assortment2589 very good point! Thanks

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@beare if you have a mortgage broker, they can sit down with you and compare the savings and show you how much interest you’ll save. It’s crazy.  

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@assortment2589 that’s a good idea. Thank you

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@assortment2589 yes!  

Answer 4

Fortunately, we don’t have a mortgage payment anymore but when we did and we refinanced, we refinanced into a 15yr. It only increased our monthly payment by $100 and it totally made a difference in how much you were paying towards principal vs interest. Like in our 30yr we were paying $900 in interest and $300 in principal but when we refinanced, it flip flopped that and $900 was going toward principal and $300 towards interest. It’s like you’re not throwing so much money away each month and you begin to really see a difference in your mortgage balance.  

Comments

@gadwall this is great information, thanks!  

Answer 5

When we purchased our house we immediately refinanced for 15 years, we didn’t even make that first payment we have 12 years left and we plan on paying it off in 6 max 8 years, we plan to be mortgage free by the age of 42. We also used all our equity from our previous home over 150k and invested it as a down payment.  

Comments

@carchemish97880 that’s awesome!  

Answer 6

Our broker broke it down and we will be paying a little bit more per month, but saving 68, 000 over the life of the loan (including closing costs) by switching to a 20 year. He broke it all down in a table for us. I can send you his info if you’d like.  

Comments

@gable I’d love that! Thank you

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@beare Jason Fowler - Compass Mortgage Inc

Answer 7

We just closed our refinance with a 15 year It increased our monthly payment less than $200 It made the most sense to do so with how low the rates are We locked in at 2. 75%

Comments

Who did u use?  

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@bradshaw he’s a friend of my husbands - we’ve used him a few times Wonderful to work with and very through

Answer 8

If you make one additional payment a year towards principle you will knock 7 years off your mortgage. My advise? Get a 30 year and do that. Or make two payments extra a year and you knock off a couple extra years. That way if you’re ever in a pinch you can have the comfort of the lower payment of a thirty year mortgage. Just this realtors opinion. But it really knocks off a ton and let’s you be mortgage free quicker

Comments

@waly23 this is exactly what our real estate attorney told us when we closed 7. 5 years ago. We have a rate of 3. 75% now so not awful but was getting intrigued by the low rates others were talking about. I’m thinking we may just hold off and stick to the 1-2 extra payments a year. Thanks!  

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@waly23 yup! This is exactly what we just did. We put aside an extra $200 a month to put towards principal, and we will pay off several years early.  

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@beare yes! By the time you rolled any fees for refi in it would not be worth it IMO. Keep doing that!  

Answer 9

We were able to lock in at 2. 875% but now the rates are back up some. But we were at 4. 25%

Comments

@idiocrasy what term was the 2. 875% for? I did see rates went up today.  

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@beare I think he still did the 30yr but now we won’t have PMI anymore. My husband does all that so I really don’t know all the logistics of it. We are in Utica and went with Eureka Savings Bank we have a friend there and they don’t sell mortgages out

Answer 10

We refinanced 2 years ago to get rid of our PMI, we did the 15 year. It really depends on what you can afford. I know a great mortgage broker. Joe woods from compass mortgage. Good luck!  

Comments

@figueroa88 that’s awesome! We were able to get rid of our PMI a couple years ago without refinancing. I actually did an internship with Compass Mortgage in college, they were great. I’ll reach out. Thanks!  

Answer 11

We went from 30, (28 years left) to 15 year at 2. 25%. Paying less than $300 more per month for half the loan time!  

Comments

@valorie wow! Who did you use?  

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@beare mr cooper!  

Answer 12

15 year is better

Answer 13

We got 2. 6% for 15 years through First Centennial Mortgage. We got in right when the rates dropped.  

Answer 14

We did 30

Answer 15

We went to a 15 year loan and it added $150 to our mortgage we had a small amount to bring to closing. Our rental in KY we did the same but added $200 to that mortgage. If you have any questions feel free to PM me. I’m so glad we did it

Comments

@doldrums14 awesome, thank you!  

Answer 16

15 year was a better rate by a full percentage point when we applied. But we started the process early March before everything hit. I personally won't refinance if it will extend the term and cost more in the long run.  

Comments

@fewell3 good point, thank you!  

Answer 17

We are in the process, and we are doing a 30 year because we know life can change and want what is affordable monthly.  

Answer 18

Hey girl, we just went through this! I’m happy to share what we did, and our thoughts! The rates on Refis aren’t as low right now as they were a month ago.