Refinance or other options?
by Mortgage Rates on Wednesday, September 22nd, 2010 | 1 Comment
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Great question….
What many people see right now is promotional rates. 4.875%, or lower….
However, what people don’t ask for is the APY. APY is the final rate including all expenses, appraisal, commission paid to broker, etc.
This is what your payments are going to be based on, so it’s important you find out what the APY is.
By using this calculation, you’ll want to look at what your current monthly mortgage payment is, minus the new payment. Then look at the monthly savings multiplied by the years you will have the rate.
It’s very common that most home owners refinance their mortgage every 3-4 years. However, I doubt rates will be much lower than today’s rates.
So if your looking to stay within your home for the next 10 years I would give it some serious thought.
Also, keep in mind that for a mortgage your paying interest each and every day. So to lower the interest paid on your loan long term. Try to make additional payments through out the month. If you made payments every two weeks but kept the 30 year mortgage, you’d pay the loan off at the exact same time. However, you wouldn’t be locked into the 15 year monthly payment.
Just my two cents.
P.S 30 years is always a better option than the 15 year mortgage. The reason banking institutions provide a lower rate for the 15 year is because your making a larger payment, and the term is for a shorter period of time.
Banks always want someone to borrow as much as they can, for the longest period of time……