Should you refinance? Here's a FREE, helpful little tool!

By
Real Estate Agent with Keller Williams - BV 581856
https://activerain.com/droplet/4ZTJ

I received a call from an older couple last week who wanted my thoughts regarding a refinance of their current mortgage.  

 

Coles Crossing Formal Dining Room

 

So, I asked them a few questions to better understand their situation and to grasp the goals they wished to accomplish. Basically, they wanted to reduce the time they payed off their home from 13 years down to 10 years. Now in some instances, refinancing is definitley a good thing.

 

However, the more we talked, the more I realized this couple did not need to refinance at all.  By paying just an extra $100/month towards their principal, they could achieve their financial goals without spending an additional $4000+ in fees!

 

 

Land in Willis TX

 

While we were chatting, I went to www.daveramsey.com and clicked on "Tools" from the menu bar.  Then, I selected "Mortgage Calculator". I used the "advanced version", because I believe it is actually more user-friendly. ;)   I entered their current amount owed on the home, time period left for the mortage payoff, current interest rate, extra payment amount (this couple was comfortable with $100/month extra), and the date these extra payments would begin. Clicked on "SHOW RESULTS" and presto! You have your amount of time saved, amount of money saved, and a graph showing your original payoff vs. the accelerated payoff!

 

This tool is great for buyers also!  For example, suppose John and Jane buy their first home this spring and obtain a $150,000, 30 year mortgage at 4% interest.  John and Jane figure they can contribute an extra $150/month towards their principal payment.  John and Jane will save roughly $33,700 and pay off their home 8 years, 5 months early!

 

 

SONJA PATTERSON with Executive Real Estate Services   

713.303.9463      www.har.com/SPatterson     sonja.patterson@sbcglobal.net

 

 

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Mortgage / Finance
Location:
Texas
Groups:
Realtors®
RE/MAX Active Rain Bloggers
WeBlog Anything (almost)!
Tags:
refinancing
lower interest rates
pay off your mortgage
dave ramsey tools
dave ramsey mortgage calculator

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
4,268,834
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Sonja, that was excellent advice, and some homeowners do not think of the refinance fees associated.

Feb 27, 2017 06:07 PM #1
Rainmaker
237,935
Jerri McCombs, Broker
Dogwood Real Estate Services - Hendersonville, NC
Hendersonville NC Relocation

Yes the refinance charges are steep and some really shouldn't be paying that. Paying extra each month is so much better, and once a buyer sees the savings they should be on that path! Thanks for the lead to the calculator from Dave Ramsey. He is great and I read him a lot, but I didn't know about that one. I will check it out and save it for future clients!

 

Feb 27, 2017 07:18 PM #2
Rainmaker
500,963
Sonja Patterson
Keller Williams - BV - College Station, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

Thank you Joan! Yes, they had already paid $600 for an appraisal.  They called me the night before they were going to sign on the dotted line.

 

Jerri, glad you stopped by! My daughter took a Dave Ramsey money management class for high schoolers last year.  That is how I learned about the mortgage calculator!

Feb 27, 2017 09:13 PM #3
Rainmaker
2,089,417
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good Morning Sonja - that is really the best advice to give.  Refinancing does not make sense for them.

Mar 01, 2017 06:50 AM #4
Ambassador
2,192,409
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

I bet this couple thinks you are their hero. You gave them very sound advice. I also go over the numbers with my buyers and encourage to them to make higher payments per month if it's a comfortable situation for them. 

Mar 01, 2017 02:34 PM #5
Rainmaker
500,963
Sonja Patterson
Keller Williams - BV - College Station, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

Hi Grant, thank you for your positive comment.

Yes Debbie, I received a lovely thank-you letter in the mail, and they are now planning on installing granite countertops with the $$ saved!

Mar 14, 2017 09:40 AM #6
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
500,963

Sonja Patterson

Texas Monthly 5-Star Realtor Recipient for the Hou
Ask me a question
*
*
*
*
Spam prevention