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Refi at 15 yr or stay at 30yr

Could one of the many experts who post on this site please help me with this facet of the conversation:I have a $300,000 30yr fixed mortgage at 5.2% and $100,000 in the bank. I plan to own (or rent) the home for a long time (15yrs or more). Should I be looking into paying off a big chunk and refinancing at a lower rate for 15 yrs? by suesuelee45 from Anaheim, California. Mar 8th 2011 Reply


Daniel Lotter (dnllotter)
#27 ranked lender in Colorado - 58 contributions

Give us a call - what is your current payment - and how long have you been in the 30yr. mortgage. We may be able to get you into a 15yr. same payment or even a 10yr, with alittle down and same payment. Rates are really good right now and if you want to pay your home off quicker this may be the way to do it. Call Daniel Lotter/Tri Star Funding to discuss your options - 877-489-8249 toll free

Mar 8th 2011
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Rudi Hofmann (CaPortfolioLoans)
#281 ranked lender in California - 380 contributions

If you decide on 15 year fixed, today's rate is 4.250% compared to a 30 year fixed at 4.750%.What I have found is most folks that went to a 15 year, within 2 years they're refinancing back to a 30 year.... The payment is about 1/3 higher.... A slight reversal in finances makes it difficult to maintain....A safer method might be to pay more to principal when you are able and pay your loan off sooner.... Happy funding, Rudi

Mar 8th 2011
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Jim Costello (jimc@homemortgagelender.com)
#82 ranked lender in Florida - 22 contributions

My advise would be to not refinance. The reason is because you will not be benefiting from a lower rate and the closing costs will cost too much. A better option is to figure out what the 15 year payment would be and send that extra payment every month to your mortgage company. I would write a separate check for that amount and in the memo section of the check write, "apply to principal". This way you have separate documentation and clear directions to show how much is actually given to reduce the principal. Some lenders will only apply that extra money to interest and not principal, so this is a good safeguard. Put that $100,000 somewhere safe for a rainy day.

Mar 10th 2011
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Rick Pelleriti (RickPelleriti)
#363 ranked lender in California - 59 contributions

As I write this on March 14, rates have improved quite a bit since you asked the question. I would now say you probably will benefit from refinancing - as your savings will be justified despite the loan costs. Depending on home value and your FICO score - we are now seeing between 4.50% and 4.625% for the 30 yr.The money you save can be applied to principal - so you can retain flexibility versus a mandatory much higher payment for the 15 yr.Feel free to call me to discuss and quantify your options.Good luck,Rick PelleritiCalifornia Upfront Mortgage Banker530-205-9145rpelleriti@ascenthq.com

Mar 14th 2011
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