WHO: Me (SAHM) and DH, 3 kids
WHAT: $245k loan on home (value $317, balance $155k) 5.37% fixed 30 yrs
WHEN: bought 2004 (planning on staying here long term)
DEBT: nothing but the house!
Two options we're looking at:
1.) Straight refinance thru our existing loan holder (Chase). 4.5% 30 yr loan, brings down the payment $300, NO CLOSING COSTS (appraisal, fees, escrow and other crap fees). If we don't pay the lower amount and just keep paying the SAME amount we've been paying, that knocks the loan down to 17 yrs and just under 15 yrs if we do that PLUS throw in an extra full payment/yr).
2.) Refi to a 15 yr 3.75% loan thru our bank (Regions)... 1/2 payment will be auto-drafted every other Tuesday. Total monthly amount is $50 MORE than what we're currently paying. The numbers equate to making an extra mortgage payment/yr because of how the weeks fall, so the loan is really a 13.5 yr loan. WOO HOO! Out of debt even faster! But there are about $2k in closing costs with this option.
CONCERNS: My husband's job is in sales, which is UP and DOWN depending on the year. And really, this job is not guaranteed year after year (such is the nature of sales). But for TEN years, he's made a good living for our family... and we've been able to beat down our mortgage. But we're not sure about his job security going into this next year. This is why option 1 looks enticing. We wouldn't be obligated to as BIG of a mortgage payment but can make EXTRA payments as money is there (which we've done many, many times in the past).
If I had a crystal ball and knew job security would be there for many years out, we'd jump on option 2 in a heartbeat! Owning our home in 13.5 years is VERY appealing... b/c I know it would be even sooner with us doing our due diligence beating down the principle any chance we'd get. Even if we rode out the life of the loan, the total money outlay would be MUCH LESS being a 15 yr vs 30 yr.
Any bits of advice?? What am I missing here?? Anyone ever do a bi-weekly auto draft? We looked at a straight 15 yr loan (that isn't auto-drafted) but the closing costs were much higher. We're trying to get this refi done with as little extra "fees" involved.
Thanks everyone!!
WHAT: $245k loan on home (value $317, balance $155k) 5.37% fixed 30 yrs
WHEN: bought 2004 (planning on staying here long term)
DEBT: nothing but the house!
Two options we're looking at:
1.) Straight refinance thru our existing loan holder (Chase). 4.5% 30 yr loan, brings down the payment $300, NO CLOSING COSTS (appraisal, fees, escrow and other crap fees). If we don't pay the lower amount and just keep paying the SAME amount we've been paying, that knocks the loan down to 17 yrs and just under 15 yrs if we do that PLUS throw in an extra full payment/yr).
2.) Refi to a 15 yr 3.75% loan thru our bank (Regions)... 1/2 payment will be auto-drafted every other Tuesday. Total monthly amount is $50 MORE than what we're currently paying. The numbers equate to making an extra mortgage payment/yr because of how the weeks fall, so the loan is really a 13.5 yr loan. WOO HOO! Out of debt even faster! But there are about $2k in closing costs with this option.
CONCERNS: My husband's job is in sales, which is UP and DOWN depending on the year. And really, this job is not guaranteed year after year (such is the nature of sales). But for TEN years, he's made a good living for our family... and we've been able to beat down our mortgage. But we're not sure about his job security going into this next year. This is why option 1 looks enticing. We wouldn't be obligated to as BIG of a mortgage payment but can make EXTRA payments as money is there (which we've done many, many times in the past).
If I had a crystal ball and knew job security would be there for many years out, we'd jump on option 2 in a heartbeat! Owning our home in 13.5 years is VERY appealing... b/c I know it would be even sooner with us doing our due diligence beating down the principle any chance we'd get. Even if we rode out the life of the loan, the total money outlay would be MUCH LESS being a 15 yr vs 30 yr.
Any bits of advice?? What am I missing here?? Anyone ever do a bi-weekly auto draft? We looked at a straight 15 yr loan (that isn't auto-drafted) but the closing costs were much higher. We're trying to get this refi done with as little extra "fees" involved.
Thanks everyone!!
I was thinking I had some strange mortgage that wasn't going down as quickly as yours! I guess if there is risk you cannot make the higher payment then go with the cheaper payment option, but also, from what I understand and how my math worked out usually you want at a minimum 1% lower than your current rate to make the refi "worthwhile". So looks like you are right on the cusp and you would need to make sure you stick to your plan of still payment what your old payment was or else you won't come out ahead in the end. We didn't refi last year because we were on the cusp, it just wasn't worth all the hassle for a few bucks. This year though we got a rate 1.3% lower and a shorter term, so we jumped.
) so, its seems #1 would be the right move.
My husband works really hard! We've been very blessed to have the income of being able to beat down our mortgage PLUS still have extra fun stuff like trips and a boat (paid in cash). I do cut corners in a lot of other areas though: I'm an avid couponer and CVS'er, clothes are only bought ON SALE or at goodwill! Just overall, we don't have high-end 'tastes'... just don't mess with our vacation time! 
Thank you. When I started reading what you said about Chase - I thought - OH NO. She's gonna tell me it's a scam and run for the hills!! This really does make me feel better. I played "CSI" with the Chase guy and asked him "Are you SURE???" and "What's the catch??" like a million times! I mean really, how many times do we get offers in the mail that say, "YOU'VE BEEN CHOSEN FOR THIS SPECIAL OFFER!". 
