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I bought a house 3 yrs ago. I'm able to refinance at 3.3% but for 30 years. Is this wise?

by mvp593_478_219 from El Paso, Texas. Oct 31st 2012 Reply


Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

Probably. You didn't indicate your current rate or the total cost to refi. If your concern is stretching out you payments an additional 3 years, and assuming all closing costs are rolled into the new loan, have your Loan Officer calculate how much extra you would need to pay each month so that you make the last payment in the same month that your last payment is due on your current loan. If your new total payment is less than your current payment, the answer is yes. If you really want to benefit yourself, add enough extra each month so you are paying the same payment on your new loan as you are currently paying. The extra principal will knock more months off your total term. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Oct 31st 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Probably!! But without knowing what your current rate is, or how much the new loan is costing you, it's hard to say for sure.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Oct 31st 2012
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Barb Lanis (BarbLanis)
#72 ranked lender in Illinois - 663 contributions

I would say YES. You are not that far into your existing loan so the impact of "starting over" is not that great. However, many of my clients have been choosing a 20 year rather than the 30 because their payment stays roughly the same, if not slightly lower. If you're comfortable with your existing payment, think about the 20 year.

Oct 31st 2012
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Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

Yes

Oct 31st 2012
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Eric Blossman NMLS 211144 (eblossman)
#117 ranked lender in Texas - 63 contributions

It all depends on what your interest rate you are paying now. You should take the current principle and interest and times it by the number of months and compare it with the new principle and interest payment times 360 (30 year loan). Subtract the first one by the second and that will give you the savings over the life of the loan. Typically speaking if you can drop the interest rate by 1.00% or more it makes sense to refinance. Another consideration would be to just refinance into a 27 year mortgage and not add any years to your mortgage. This program is available and has become increasingly popular. If you need any help, just let me know.

Oct 31st 2012
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Henry J Daniels, CMPSI, CMHS (HenryJDanielsNationalMortgage)
#1 ranked lender in Texas - 135 contributions

It depends on your current rate and loan amount. Many times it will cost you more in the long run and is not always wise. I'd be happy to run a full analysis with only your current mortgage statement to see if it's in your best interest.

Oct 31st 2012
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Shaun Fischer (shaun.fischer@guaranteedrate.com)
#66 ranked lender in Illinois - 9 contributions

Most likely your rate is now is at least 4.5% or more. If that is true, it would be wise to refinace. The general rule of thumb is that if you can save more than 1 percent on your on your rate you should. The next step would to be find a mortgage professional with the lowest rates and fees.

Oct 31st 2012
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Rick Carrier (rickcarrier)
#30 ranked lender in Texas - 28 contributions

There are several factors involved in that decision. The loan offier you are working with should take the time to ask you what your goals are for the refinance, what your current rate is, the cost of the refinance, and how long you will be in the home. A ture mortgage specialist should get all of this information from you to be certain that you are getting the right product for your needs. Be sure your total payment is also decreasing enough to justify the closing costs. Depending on the term, you may be able to find a little better than 3.3% right now. If you would like and expereerienced mortgage professional to run these scenarios with you, I would be more than happy to help.

Oct 31st 2012
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

As you can tell from the other answers, it really depends on the details. I normally suggest refinancing with minimal fees even if the rate is somewhat higher rather than getting a super low rate but paying a lot of fees and ending up with a significantly higher mortgage balance. If you can recapture the "costs" of the loan in less than 2-3 years I think it is worth it. Another 30 year loan is not a big deal if the payment savings helps you with other goals, or if you can apply the monthly savings against the principal and pay the house off a couple years sooner than you would on your current mortgage. Even if you're only cutting off 2 years on the mortgage, if your payment is $1500/mo that is a savings of $36000. If you pay off in 25 years that means you've effectively saved $1440/year over what you would have paid. Not huge, but a whole lot more than clipping coupons. AND, if you can do it at relatively low or no cost (lender and attorney/title fees - not the cost of your escrows) its a "no brainer".

Oct 31st 2012
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

Sounds Great!!! Call a LOCAL lender to get started!!

Oct 31st 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,960 contributions

Does refinancing make sense? There are so many variables... Rate difference, term difference, savings, costs, etc. A conversation with your local LICENSED Professional should be able to give you the answer. I'm a fan of NOT going backwards in years. We offer loan terms from 8 years to 30-years, so you could refinance to a 27-yr loan if you wanted, but we lend in MN and WI Only.

Nov 1st 2012
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