I have a home loan that was originally for $305,000 / 30 yr @ 3.75% that ends in 2044. I currently owe approximately $240,000 on the loan. My monthly payment comes out to around $1412 before local taxes, insurance, etc.
I've noticed that at this point in the game, I'm only paying about $650/mo on principal. So, I'm wondering, does it make sense to refinance into a lower payment and then just make extra principal payments on top?
I did a quick search on 30 year loans and found one for 3.5% (3.691% APR). This has upfront costs of $5600 due to points and origination fees, but the monthly payment comes out to $1078/mo. My thought process is that I could keep the payment the same and immediately apply the extra $400/mo to principal. Just a quick look at an amortization chart looks like I start out ahead at $777/mo going to principal.
In either case, I've been thinking about adding an extra $350-500/mo principal payments on top of my ordinary payments. It looks like in both cases, I end up paying the house off quicker So, does it make sense to refinance, or am I missing something in the math here?
My other thoughts are that if I ever move, I could rent the house out, and here a lower monthly payment might come in handy.
Submitted June 01, 2019 at 05:57PM by akitkatattack http://bit.ly/2W6R5xR
