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Should I refinance into a 15 year or 30 year?

My current home mortgage is a 30 year FRM at 5.5%, I've paid off close to 40% of the loan (was 400k, now 240k), and I was wondering if I should refinance into a 15 year to pay off the loan faster, or keep a 30 year FRM to keep payments cheaper. Will both options be less money than currently, and if so, which one would cost me the less over the long haul, I'm assuming the 15 year. Credit is impeccable (840), and I have no outstanding debt besides this mortgage. by blaine_598_195 from Tampa, Florida. Nov 18th 2011 Reply


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

If you were my client, i would suggest the 15 year mortgage.. you would pay off your loan in half the time.. if you refinance on a 15 year loan and continue to make the same payment your used to making now, you can pay off your loan in less than 11 years... WilliamAcres.com

Nov 18th 2011
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James Sutch (jimsutchloanguy)
#94 ranked lender in Florida - 3 contributions

Refi into a 15 year. Don't prepay anything.

Nov 18th 2011
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Jim Costello (jimc@homemortgagelender.com)
#82 ranked lender in Florida - 22 contributions

I would recommend refinancing into a 15 year loan. The savings per month will be significant and you are already used to paying a higher amount based on the fact that you have paid off 40% of the loan already. The rate for a 15 year would be in the low 3's. Grab that low rate!

Nov 18th 2011
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Jeff Cost (midwestlender)
#39 ranked lender in Ohio - 164 contributions

Hello Blaine,To give you the most accurate information to your question I would need a little more info such as the current estimated value. Unfortunately FL values have been hit hard and dependeing on what the value is would detrmine the answer to your question. The new HARP program rolls out in a few months and that will eliminate the potential value problem. 15 yr fx rates are @3.875% =$1,760.25 & 30 yr fx rates are @4.375 = $1,198.28 based on a $240,000 mortgage. ENG Lending, A Division of Bank of England, always puts your best interest first. We would appreciate the opportunity to serve you. Please visit us at www.cincinnatimortgagerate.net. You will soon find that we are so much more than a Mortgage Banker; we are a company that is dedicated to empowering our clients and referral partners. Don't forget to visit our Facebook Fanpage at http://www.facebook.com/pages/ENG-Lending-Cincinnati/171183536269710#!/pages/ENG-Lending-Cincinnati/171183536269710?sk=wall Or Call Anytime 513-403-6260

Nov 18th 2011
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Marcus Buchanan (mbuchanan)
#308 ranked lender in California - 28 contributions

Blaine,Currently with interest rates as low as they are you would benefit from refinancing. The question you will have to ask yourself is; are you going to be in the financial position to be able to make a higher payment on a 15 year mortgage for the next 15 years? Or would it make more sense to have the flexability of having a lower payment with the discipline to pay extra towards your principle. The answer to your question to which will cost you less over the long haul, well most definatly the 15 year based on the amortization schedule. The more you pay towards principle the less you pay interest as you we know. Look at what you have already accomplished by paying down a mortgage 160k is awesome. Send me an email, that way i can send you a well put together spreadsheet that you can play with before you decide what you want to do. mbuchanan@paramountequity.com

Nov 18th 2011
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Mark Collins (ahfund)
#129 ranked lender in Florida - 13 contributions

I would always encourage my clients to finance for 30 years. With interest rates as low as they are you can probably invest the difference and make a spread from doing so. You can always pay extra if you choose to to minimize the time you will owe the money,One easy technique is to ask your lender for an amortization schedule. You then make one payment as is required and pay the principal portion of the next payment - this will cut one month of the end of your loan. If you send it six principal payments you just cut half-a-year off the loan. But if an emergency arises and you find yourself in a pickle to make the payments for 15 years, tough. Your lender won't be too helpful in letting you slide.Good luck!

Nov 18th 2011
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