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Answers (10)
- Mike Leyden, "leydenrealty"
- Contributions:61
Charlie Brown and Clay are correct and I am incorrect. I am duly chastised.
I should have gone to the source of all mortgage knowledge.
http://mtgprofessor.com/calculators/Calculator2a.html
http://mtgprofessor.com/calculators/Calculator2a.html
- Clay Branch, "Georgia Loans"
- Contributions:7839
Cat, I believe what you will find with your streamline is the new monthly mortgage insurance payment will be much higher than what you pay now. Even though you will get a reduction to principal and interest, the higher MI payment will offset much of the P & I benefit. If you want to know if you have any options, list your current payment showing principal / interest plus the mortgage insurance payment. Also state the loan balance, estimated appraised value, and credit score, that way we can suggest other options.
- Clay Branch, "Georgia Loans"
- Contributions:7839
LOL, my numbers were based on the extra $200/mo, not the $216 it would be if they paid $1200......I also got the $51337 figure when I used the $1200 payment.
- Clay Branch, "Georgia Loans"
- Contributions:7839
Mike, your numbers were looking good until you got to the savings part, the borrower would save $48,772 not $101,000.
"A $200,000 loan at 4.25% paid back over 30 years (360 months) will have a payment of $984/mo. Paying $1,200/mo will mean you will pay off the loan in 257 months instead of 360. In my example, this borrower would save 103 payments at $984 each which adds up to $101,000."
For Mike.
A 200K loan @ 4.25% with a 10/1/11 first payment of $983.88 would have a final payment date of 9/1/2041 with a payment of 983.88.
If a $1200 payment was made on that same scenario, they would have a 10/1/11 first payment of $1200 and a final payment date of 10/1/2032 with a payment of $459.69.
That is 253 months instead of 360 and a savings of 107 months, not 103. They also would not save $101,000, they would save exactly $51,337.08 in interest and payoff 107 months earlier. To merely add up 103 payments of 984 is remedial and shows zero understanding of an amortization schedule and how payments apply to principal.
For Mike.
A 200K loan @ 4.25% with a 10/1/11 first payment of $983.88 would have a final payment date of 9/1/2041 with a payment of 983.88.
If a $1200 payment was made on that same scenario, they would have a 10/1/11 first payment of $1200 and a final payment date of 10/1/2032 with a payment of $459.69.
That is 253 months instead of 360 and a savings of 107 months, not 103. They also would not save $101,000, they would save exactly $51,337.08 in interest and payoff 107 months earlier. To merely add up 103 payments of 984 is remedial and shows zero understanding of an amortization schedule and how payments apply to principal.
I totally agree with Clay, the numbers are off.
Ignore the agents who cannot help themselves from posting mortgage advice even though they have no license.
Ignore the agents who cannot help themselves from posting mortgage advice even though they have no license.
- Mike Leyden, "leydenrealty"
- Contributions:61
Go with a new 30 year loan. Or you can get a 29 year loan if you wish but I'd get a 30 and make extra principal payments.
First off, use the savings to establish an emergency fund. Then pay down or pay off credit cards. Then use your 200/mo savings to pay extra principal per month.
You can pay off a new 30 year loan at 4.25% faster than you can pay off an existing 29 year loan at 5.5% if you make the "old payment" on the new loan.
For example, if you owe $1,000/mo but pay $1,200/mo then the extra $200 goes towards principal (that is, the amount you still owe). Your payment will never change by paying extra principal you will shorten the term of your loan.
You can really shorten the term of the loan by doing this and, consequently, be a lot better off financially.
A $200,000 loan at 4.25% paid back over 30 years (360 months) will have a payment of $984/mo. Paying $1,200/mo will mean you will pay off the loan in 257 months instead of 360. In my example, this borrower would save 103 payments at $984 each which adds up to $101,000.
First off, use the savings to establish an emergency fund. Then pay down or pay off credit cards. Then use your 200/mo savings to pay extra principal per month.
You can pay off a new 30 year loan at 4.25% faster than you can pay off an existing 29 year loan at 5.5% if you make the "old payment" on the new loan.
For example, if you owe $1,000/mo but pay $1,200/mo then the extra $200 goes towards principal (that is, the amount you still owe). Your payment will never change by paying extra principal you will shorten the term of your loan.
You can really shorten the term of the loan by doing this and, consequently, be a lot better off financially.
A $200,000 loan at 4.25% paid back over 30 years (360 months) will have a payment of $984/mo. Paying $1,200/mo will mean you will pay off the loan in 257 months instead of 360. In my example, this borrower would save 103 payments at $984 each which adds up to $101,000.
- Jeff Sharp, "jmsharpRE"
- Contributions:15
Dear Cat,
If you are only one year from the previous loan, you haven't paid much principal down any way. Take the 200 savings on the no cost refi. If you that concerned about loosing a year, have your loan officer give you an amortization chart that will show you how much you should pay per month extra to pay it like it is a 29 year loan. Make sense?
If you know what rate he quoted you and your loan balance you can find a mortgage calculator on the internet that will show you what the 29 year payment would be.
I hope that helps.
Sincerely,
Jeff Sharp
If you are only one year from the previous loan, you haven't paid much principal down any way. Take the 200 savings on the no cost refi. If you that concerned about loosing a year, have your loan officer give you an amortization chart that will show you how much you should pay per month extra to pay it like it is a 29 year loan. Make sense?
If you know what rate he quoted you and your loan balance you can find a mortgage calculator on the internet that will show you what the 29 year payment would be.
I hope that helps.
Sincerely,
Jeff Sharp
- Clay Branch, "Georgia Loans"
- Contributions:7839
The 30 Yr option saves $200/month but the 25 Year adds 71/month? That doesn't make sense. What is the loan balance and what do you think your property would appraise for? List the breakdown of your current payment, Principal & Interest, Mortgage Insurance,Taxes, Insurance.
should we refinance
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