Mortgage Refinancing???

[CamColt]

Has anyone gone from a 30 year mortgage to a 15 year? Was it tough to handle the increased monthly payment? Also, was it worth it in the end?
We bought our house a little over 4 years ago with a 30 yr mortgage and now with the rates even lower we are thinking of refinancing to a 15 yr. The thought of an extra 200.00 a month on an already large payment is scaring me, but DH thinks we will be fine. Id love to hear others experiences.

 

[RitaZ.]

We just refinanced our mortgage from a 30 yr. to a 15 yr. mortgage. If you can handle the increased payment, go for it. It will definitely save you money in the long run, also take into account how long you plan to stay in your current home.

 

[marlasmom]

Unless the rate for a 15 year mortgage is so drastically lower, why not opt for the 30 year and make extra payments as you can. That way if there is a problem month you don't HAVE to make the extra payment and you get the benefits if you do.

 

[jwsqrdplus2]

Here is another idea: refinance at a lower rate for a 30 year, then add a little extra (whatever you think you can afford) to each month's payment. That extra needs to go against principal only (you need to check with your mortgage company to see if they have a prepayment penalty). By doing that, you can knock 5 to 8 years (depends on how much extra you can afford) off a 30-yearmortgage. Bottom line is you cannot be charged interest on principal that does not exist.

Good luck! Interest rates are awesome now.

 

[CamColt]

Originally posted by marlasmom
Unless the rate for a 15 year mortgage is so drastically lower, why not opt for the 30 year and make extra payments as you can. That way if there is a problem month you don't HAVE to make the extra payment and you get the benefits if you do.

Thats exactly what I suggested to DH! But when we figured it out both ways on the mortgage calculator the amount of interest we would be paying was a lot more(I forget exact figures now). I know it would be reduced some by paying extra along the way, but it was really a big difference. I was surprised.

Rita, the only way I plan to move is if we relocate to Florida. If we ever did that, it wouldnt be at least until DH retires(hes only 35). So, basically, no time soon.

 

[Mishetta]

We were going to go for the 15 year mortgage but we ended up with "cold feet." So, we did a 25 year loan & the new interest rate knocked our payment down $100 per month, but we will continue to pay the same payment we've been making all along, to try & reduce the number of years on the loan. We just didn't feel comfortable with a noose around our necks. This way, if we're having a tough month, we'll still have an extra $100 to play with!

Good luck with your decision!

 

[rae519]

Two years ago we went from a 30 to a 15 due to the interest rate dropping significantly. We had been paying extra on the 30 year so the new payment wasn't a big jump for us.

We just decided to take exactly what we owe (mortgage and years) and refinance again since rates dropped again.

I even refinanced his new Blazer since they were offering a 2% off your original rate through a new Credit Union! That brough it down to almost NOTHING in interest!!!

You just gotta do what's best for you and that means saving money!!!!

Rae

 

[RUDisney]

We went from 30 years to 20 years to 15 years and I still pay extra principle each month. If you can swing the extra money each month, then definitely do it. If not, see what a 20 year loan will do to the payments and interest rate... or if closing costs are an issue, see what the bank or mortgage company will do if you modify the rate on your existing loan. You won't have to pay for title insurance again if you do that, although the bank will probably charge a fee to modify the rate.

 

[rae519]

Our bank called it a "streamline" loan and the costs were minimal, as was the paperwork.

Rae

 

[Steve H.]

My BIL is doing that this week, actually. He was already paying a little extra each month, so with the refi down to a 15 year mortgage (at something like 4.875% ), he's only increasing his mortgage payments by something like $80 and cutting 7 or 8 years off his mortgage.

If you can swing it, by all means do it.

 

[Toby'sFriend]

I agree with all the advice here.

We're currently refinancing ourselves. I have always taken out 30 year mortgages that have no prepayment penalties and then calculated what my payment would be at 15 years and paid that extra amount every month...

Then on the months that we have unexpected expenses I'm only obligated for a lesser amount.

 

[rae519]

Steve H -
What a beautiful picture of a handsome child!!!
Absolutely angelical!

Rae

 

[CamColt]

Thanks for all the advice everyone. It looks like we are going to do it. Being the worry wart that I am, I find it scary, but DH who makes all the money thinks we will be fine. So, Im leaving it up to him, LOL!
We got a great rate though, 4.625. We will increase our monthly payment about 200.00, but cut out almost 11 years.