I just saved over 200,00.00 dollars! Maybe you can too.

[1969chargerrtse]

We bought our house about 4 years ago and we got what I think is a great rate at 5.85%.  It was a mortgage for 30 years, and would mean I would be about 77 by the time this house was paid for.  Well, we just refinanced at 5.25% and cut the loan to 15 years.  We just lost 10 years of payments at 2,000.00 a month!  That's 240,000.00.   We are paying about 300.00 more a month now, so minus that and you have 36,000.00 so bottom line I'm saving about 200 grand and will have the house paid off by the time I'm 65.  Cool, real cool.  This is why I have no problem buying the Charger with a home equity line from the start, because the Chargers cost  of 30,000.00 was also included in the new loan and I will have no equity line anymore.  I hope this stirs up others that could do the same.  I had no idea about this option, I thought my 5.85% loan was great, I was looking to change my equity Line to an loan and thats how this whole thing started.  What a HUGE savings, now is the time, If you were in a simular situation as I was, do yourself a favor and look into re financing now, even if you thought you had a low rate.  Just cutting years off is a big relief.  Good Luck.

[nh_mopar_fan]

We bought our house about 4 years ago and we got what I think is a great rate at 5.85%.  It was a mortgage for 30 years, and would mean I would be about 77 by the time this house was paid for.  Well, we just refinanced at 5.25% and cut the loan to 15 years.  We just lost 10 years of payments at 2,000.00 a month!  That's 240,000.00.   We are paying about 300.00 more a month now, so minus that and you have 36,000.00 so bottom line I'm saving about 200 grand and will have the house paid off by the time I'm 65.  Cool, real cool.  This is why I have no problem buying the Charger with a home equity line from the start, because the Chargers cost  of 30,000.00 was also included in the new loan and I will have no equity line anymore.  I hope this stirs up others that could do the same.  I had no idea about this option, I thought my 5.85% loan was great, I was looking to change my equity Line to an loan and thats how this whole thing started.  What a HUGE savings, now is the time, If you were in a simular situation as I was, do yourself a favor and look into re financing now, even if you thought you had a low rate.  Just cutting years off is a big relief.  Good Luck.

You never heard of a 15 yr mortgage before?

I'm sitting here with a 4.15% 15 year. Never had anything else.

[Charger-Bodie]

With banks that allow you to do it, you can also save a pile by paying every week instead of by the month. The payments are still technically due once a month, but if you pay the same amount in 4 (or 5 depending on the month) you pay Alot more principle per month instead of so much interest! 

[1969chargerrtse]

We bought our house about 4 years ago and we got what I think is a great rate at 5.85%.  It was a mortgage for 30 years, and would mean I would be about 77 by the time this house was paid for.  Well, we just refinanced at 5.25% and cut the loan to 15 years.  We just lost 10 years of payments at 2,000.00 a month!  That's 240,000.00.   We are paying about 300.00 more a month now, so minus that and you have 36,000.00 so bottom line I'm saving about 200 grand and will have the house paid off by the time I'm 65.  Cool, real cool.  This is why I have no problem buying the Charger with a home equity line from the start, because the Chargers cost  of 30,000.00 was also included in the new loan and I will have no equity line anymore.  I hope this stirs up others that could do the same.  I had no idea about this option, I thought my 5.85% loan was great, I was looking to change my equity Line to an loan and thats how this whole thing started.  What a HUGE savings, now is the time, If you were in a simular situation as I was, do yourself a favor and look into re financing now, even if you thought you had a low rate.  Just cutting years off is a big relief.  Good Luck.

You never heard of a 15 yr mortgage before?

I'm sitting here with a 4.15% 15 year. Never had anything else.

Of Course I've heard of it. I have one, but it wasn't the case 4 years ago.  At that time a 30 year was the best deal for us or I would of gone 15 years back then.  For those of us that were 30 at almost 6%, refinancing to a lower rate and cutting the time in half is the way to go.

[Orange_Crush]

If you have a 200,000 30 year mortgage at 5.85% , your payment is $1,179.00/month.

If you add $150.00 to your monthly payment, you pay it off in 22 years and save approx. 70,000 dollars in interest.  And you don't have to pay closing costs (at least 3000 bucks).

[69_500]

Did the same thing with a house a few years ago. Had a 30 year mortgage, for $1034 a month. After 2 1/2 years of making those payments, wound up refinancing to a 15 year mortgage and with including the closing cost in the refinance wound up with a payment of $1054 a month. Interest rate was about .3% lower when we refinanced.

Was hoping to do the same thing with the house we live in now but our rate is at 5.3% already so until it drops quite a bit not really going to save anything but time off the mortage. And we don't intend on living here for the remainder of the 22 years on the mortgage.

[Just 6T9 CHGR]

With banks that allow you to do it, you can also save a pile by paying every week instead of by the month. The payments are still technically due once a month, but if you pay the same amount in 4 (or 5 depending on the month) you pay Alot more principle per month instead of so much interest! 

I do that with mine....I pay bi-weekly.  It comes out to making 1 extra payment a year. Saves 7 years off a 30 year mortgage

[rusty lee]

I refied in 03 went from 30 years to 15. so now I got 10 years left wonder if it's worth to refi again. not sure of my rate 5.25     

[twenty mike mike]

Some states allow the bank to apply extra payments to your accrued interest, rather than to the principle, unless you specify where to apply the payment (oh yes, Mr. Banker, please waste my extra payment on the interest!).   

[69charger2002]

well i did the exact same thing with my last house.. bought it in 01 with 30 yr/ $870 a month. refinanced in 03 for 15 yr $1250 a month.. my total cost of the house with interest went  from $262000, to just under $144000. that is $118,000 i was saving by refinancing. of course i sold the house and made $35k profit.. but will have to do it again here pretty soon for a new house we're gonna build. i just hope the rates are low and i can save enough to just do a 15 yr up front this time
trav

[69charger2002]

Some states allow the bank to apply extra payments to your accrued interest, rather than to the principle, unless you specify where to apply the payment (oh yes, Mr. Banker, please waste my extra payment on the interest!).   

and yeah that is very true... they will do that here in louisiana. first thing my friend told me is any extra payment always mark PRINCIPLE really big on the check. legally they have to then

[Troy]

I was helping my little(est) sister with her Excel homework last week. They were doing an amortization table. It's been a long time since I really messed with it but I was amazed at the difference a few extra dollars makes. I could explain it all but this will do a better job:
http://www.century21.com/learn/calculators/amortization.aspx

One example is a $150,000 loan at 5% interest. A 15 year loan would have a payment of $1,186.19 and total $63,509.36 in interest at the end of the loan. The exact same amount and interest on a 30 year loan would have a payment of $805.23 and cost $139,880.34 in interest. That's a $380.96 cheaper payment that costs $76,370.98 more over the life of the loan. Remember that the interest per year is the same so the benefit comes in paying off the principal as fast as possible. Each loan had an interest charge of $625.00 for the first payment but the 15 year loan put $561.19 towards the principal vs just $180.23 from the 30 year loan. You're basically paying 3.5 times more in interest than in principal where the 15 year loan is nearly even (1.1 times) on the first payment. You're 195 payments in (16 years, 3 months) before you're paying more towards principal than interest with the 30 year loan but it only takes 15 payments (1 year, 3 months) to break even with the 15 year loan.

Another example: $200,000 at 5.75% ($958.33 interest on first payment)
15 years = $1,660.82 payments $98,939.71 total interest
30 years = $1,167.15 payments $220,166.89 total interest
Difference of $493.67 per payment and $121,227.18 in total interest.

Making extra payments accomplishes roughly the same thing but you have to be disciplined enough to do it. By the way, the exact opposite works for saving money. An extra $10-20 per week into a retirement account, 401k, or savings allows compound interest to work in your favor. Saving that $20 per week in your 20s equates to a few hundred per week if you wait until your 40s before thinking about retirement.

Troy

[Rack]

We bought our house about 4 years ago and we got what I think is a great rate at 5.85%.  It was a mortgage for 30 years, and would mean I would be about 77 by the time this house was paid for.  Well, we just refinanced at 5.25% and cut the loan to 15 years.  We just lost 10 years of payments at 2,000.00 a month!  That's 240,000.00.   We are paying about 300.00 more a month now, so minus that and you have 36,000.00 so bottom line I'm saving about 200 grand and will have the house paid off by the time I'm 65.  Cool, real cool.  This is why I have no problem buying the Charger with a home equity line from the start, because the Chargers cost  of 30,000.00 was also included in the new loan and I will have no equity line anymore.  I hope this stirs up others that could do the same.  I had no idea about this option, I thought my 5.85% loan was great, I was looking to change my equity Line to an loan and thats how this whole thing started.  What a HUGE savings, now is the time, If you were in a simular situation as I was, do yourself a favor and look into re financing now, even if you thought you had a low rate.  Just cutting years off is a big relief.  Good Luck.

If you don't mind me asking, what was your credit score when you first bought your home and when you refinanced?

I'm getting ready to hopefully buy a house soon and my credit score is currently at around 700. It's gone up about 170 points in the last 2 years. I'm hoping it'll be around 800 by the time I actually buy a house. I only have about 5K saved up for a down payment though.

[1969chargerrtse]

We bought our house about 4 years ago and we got what I think is a great rate at 5.85%.  It was a mortgage for 30 years, and would mean I would be about 77 by the time this house was paid for.  Well, we just refinanced at 5.25% and cut the loan to 15 years.  We just lost 10 years of payments at 2,000.00 a month!  That's 240,000.00.   We are paying about 300.00 more a month now, so minus that and you have 36,000.00 so bottom line I'm saving about 200 grand and will have the house paid off by the time I'm 65.  Cool, real cool.  This is why I have no problem buying the Charger with a home equity line from the start, because the Chargers cost  of 30,000.00 was also included in the new loan and I will have no equity line anymore.  I hope this stirs up others that could do the same.  I had no idea about this option, I thought my 5.85% loan was great, I was looking to change my equity Line to an loan and thats how this whole thing started.  What a HUGE savings, now is the time, If you were in a simular situation as I was, do yourself a favor and look into re financing now, even if you thought you had a low rate.  Just cutting years off is a big relief.  Good Luck.

If you don't mind me asking, what was your credit score when you first bought your home and when you refinanced?

I'm getting ready to hopefully buy a house soon and my credit score is currently at around 700. It's gone up about 170 points in the last 2 years. I'm hoping it'll be around 800 by the time I actually buy a house. I only have about 5K saved up for a down payment though.

I'm happy to report 830.  He said our credit rating was a big plus.   You'll do fine, look around and get prices.  It's a great time ( still ) to get a loan.