Should I Refinance Into a 15 Year Mortgage?
If you qualify now may be a very good time to do this. Several people are refinancing from a 30 year mortgage into a 15 year mortgage and with their lower principal and the lower interest rates their payments are not that far apart- and the house will be paid off much earlier. Be aware though, its easy to get excited about refinancing but if you have started to pay down significant equity on your mortgage then it might not be the best for you as you start paying interest all over again. Also, if you plan on selling your home in the next 12-24 months it might not make sense either as it can take that long to cover all the costs of the refinance.
As an example for a $250,000 mortgage at 6% the payment (principal and interest) is $1,811 but at 3.5% on a 15 year mortgage its $2,099. So for a difference of about $300 per month the home is paid off 15 years earlier and in half the time!
Be sure to check with your financial advisor or CPA to see if refinancing now is the best thing for you to do, and also give us a call for a lender referral, we'd be happy to pass along the lender we work with.
