Comments on: What's better, paying ahead on our 30 year mortgage or refinance to a 10 year mortgage?

By: goofycollector

goofycollector — Sat, 10 Nov 2007 19:51:08 +0000

I would simply pay the additional $500 each month as principal. There is no sense in paying the fees to do a refi. Don't call a broker, it's in their best interest that you refi, not yours. Be disciplined and pay it down aggressively now, while you have the money. Most mortgage companies have an amortization estimator on their sites, you can put in what extra you want to pay and it will forecast out when you will be done with it. I did that and try to send every last cent to my mortgage company after all the bills are paid, sometimes it's a lot, sometimes it's not (just lost my job), but watching what extra principal payments does to the life of the loan makes me feel better when I send it off.

Some people will say take that $500 and invest it as you will make more on your money over the long term. You have to know what's right for you. I'd rather have a paid off house then watch my money go up & down every day. At least that way, nobody will ever be knocking on my door to foreclose.

Good luck, and good plan trying to pay it off early.
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Mortgage business……17 years, in my house 5 years on a 30 year mortgage with 12 to go……

By: qman

qman — Sat, 10 Nov 2007 18:21:58 +0000

Keep the 30 and pay extra principal. Too many fees with refinancing and you won't get a better rate.
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By: hooterville

hooterville — Sat, 10 Nov 2007 17:03:03 +0000

Since both interest rates are the same, it should be a wash. I'd save the refinancing fees and pay the extra $500 on the present loan. Make sure they apply the extra money to principal and not future payments. You also have flexibility in case something happens
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By: heybulldog

heybulldog — Sat, 10 Nov 2007 16:40:45 +0000

Well, if you pay an extra 500 on the 30yr. You would pay it off in about 15 or 16yrs.
If you refinanced for a 10yr loan. You would pay more than the 1150 a month.

It's best to pay it off asap if you have the money and no other debts
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By: raringvt

raringvt — Sat, 10 Nov 2007 16:30:39 +0000

This is really going to vary based on your circumstances (credit score, home equity, etc).

Talk to a mortgage broker to help figure it out. Be wary of anyone who instantly says refinancing will be best–they are just trying to get a commission on your refinancing.
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By: siouxxib

siouxxib — Sat, 10 Nov 2007 16:29:25 +0000

It all depends what you overall interest payment would be, but the advantage you have now with the 30 year mortgage is that if some time in the future if things get tight and need money for other things, you could fall back to the 650 payment. You could also use some of that for other investments, but then it depends how much return you will get on that investment as compared to how much interest you will save with an early payoff..
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By: rlc_60504

rlc_60504 — Sat, 10 Nov 2007 16:26:33 +0000

What are the interest rates in both scenarios?
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