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Should we refinance?

We have a mortgage balance of $82,000 @ 5.375% interest rate with a maturity date of May 2034. We are paying an extra $265/mo. to pay it off by 2020. Should we refinance? 15 year?
  • October 30 2010 - US
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Answers (5)

Given your current loan balance, the realized monthly payment savings from refinancing would be nominal at best.  However, for the cost of refinance, there are other payment accelleration programs you could potentially employ that will save you far more interest than refinancing. 
  • October 30 2010
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Profile picture for MoniqueU
what state are you in?
if you were in texas and have ever done a cash out,  by state law you couldn't refinance without getting the rate close to what you have.
  • October 30 2010
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In your case, I'd have to agree with Ryan below.  If your additional payments have you paying your loan off by 2020 (by your time table), then I'd keep doing what your currently doing.  Why incur the additional costs for a new loan?  Also, another suggestion for you to think about, if it makes sense for you, is to maybe place the additional funds into an investment account.  Once your investment account reaches the balance to fully pay off your mortgage, then you have that option.  I'd suggest speaking with your financial advisor about where to place the money.  It's just a thought.  This way, you have it if you need it (emergency or opportunity) until it's time to pay off the mortgage.  Hope this little suggestion helps.
  • October 30 2010
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The general rule is that you should refinance if you can save $200 or more

per month on your mortgage with all of the costs rolled into the loan.
  • October 30 2010
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Profile picture for Ryan Rygmyr
You should balance out the cost of the refi versus the extra principal you are paying now.  In other words, you may be already paying the home off in 15 years or less.
  • October 30 2010
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