Save $1,000’s by Refinancing Your Mortgage to a Shorter Term.

By
Real Estate Broker/Owner with DMK Real Estate Ct RE Broker 0789963

Save $1,000’s by Refinancing Your Mortgage to a Shorter Term.

Time to Refinance???  A case study of Mortgage Term 30 Year vs 20 Year.

Refinancing with a 20 year mortgage does make sense.  When refinancing you want to take a look at monthly payments, percentage rates, term of loan and then at total cost of loan and total interest payments of loan.  If you take a look at the example down below you can see that with simply lowing your interest rate by 1% you can save thousands of dollars. If you lower the length of time (term of your loan) of the loan you can also save thousands of dollars over the course of the loan.  Check with your local Mortgage Broker, Mortgage Banker and Lending Institutions because usually a 20 year mortgage tends to be a 1/8th of a point lower than a 30 year mortgage.

 

The case study below is a refinance of a 30 year $400,000 loan after 6 years of paying the original loan that resulted in refinance principal of $363,752. The example includes principal & interest payments (P&I), taxes and insurance payments are not accounted for. Whenever considering a refinance you should consult your personal Certified Financial Planner (CFP) and Certified Public Accountant (CPA) for your individual needs and situation.

 

 20vs30yrMtg

 

** The Principal  & Interest Total and the Interest Total is if you keep the full life of the mortgage from start to end. 

*** If you keep the original 30 year mortgage at 5.5%, over the next 24 years your Total Principal & Interest payments will be approximately $654,094.

 

For more information and tips on shopping for mortgages see below:-

8 Ways to Reduce Mortgage Closing Costs ~ WiseBread Article Oct '13.

How to shop for a Mortgage.

How to find the best Mortgage Rates in Your Area.

 

 

 

 

 

 

Posted by

David Popoff
Connecticut Licensed Real Estate Broker
Realtor® Green
Seller Representative Specialist
Accredited Buyer Representative
candidate
LEED AP Homes

 

DMK Real Estate, Darien, CT.
Cell (203) 228-0646
DMKrealestate.com

 

 

 

DMK Realty, 06820 

 

 

 

 

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Topic:
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Connecticut Fairfield County New Canaan
Groups:
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Mortgages
Connecticut Professionals
Tags:
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Rainmaker
357,840
Dee Toohey
Innovative Realty Solutions Group - Longwood, FL
Broker, ABR, AHWD, CIPS, FMS, ePro

I like paying the principal due for the following month, which saves the interest for that month.  I know a lower rate is a good thing but if someone is stretching to make a 15 year loan payment and they get into a situation such as an illness and job loss, they may not be able to make the payment. 

Either way takes smart financing and handling of your finances.

 

Sep 03, 2014 09:14 PM #1
Rainmaker
749,542
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Dee so true, one can always just pay a few dollars to $100's each month in additional principal when paying a mortgage and save on interest payments during the whole of the loan.

Sep 03, 2014 10:30 PM #2
Rainmaker
3,347,111
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the post. I will bookmark this post and share it with others.

Oct 02, 2014 09:29 PM #3
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Rainmaker
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David Popoff

Realtor®,SRS, Green ~ Fairfield County, Ct
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