I haven't got a clue how to figure out if it makes sense for us to refinance or if we'd come out about the same by just making extra payments on the existing loan. If anyone can help run the numbers, that would be great. Let me know if you need numbers or details I haven't provided here.
Current mortgage is a 25-year fixed at 5.875%. We have 18 years, 2 months remaining, though I don't believe that reflects extra principal payments we have been making so the actual remaining term is a bit less than that. Balance is about $91,000 and the P & I is $697/month. We currently pay at least $200/month extra.
We could get a 7/1 ARM at 4.125% for 90K with a monthly payment of $436. If we continued to pay the same $900/month that we currently pay, when would it be paid off? How about if we could also pay an additional $5,000/year toward principal on top of that $900/month? Would it be repaid before the first rate adjustment in 7 years? The first adjustment is capped at 5%, still less than we pay now, so for at least 8 years, the rate would be lower than now. Could the loan be gone in 8 years?
Current mortgage is a 25-year fixed at 5.875%. We have 18 years, 2 months remaining, though I don't believe that reflects extra principal payments we have been making so the actual remaining term is a bit less than that. Balance is about $91,000 and the P & I is $697/month. We currently pay at least $200/month extra.
We could get a 7/1 ARM at 4.125% for 90K with a monthly payment of $436. If we continued to pay the same $900/month that we currently pay, when would it be paid off? How about if we could also pay an additional $5,000/year toward principal on top of that $900/month? Would it be repaid before the first rate adjustment in 7 years? The first adjustment is capped at 5%, still less than we pay now, so for at least 8 years, the rate would be lower than now. Could the loan be gone in 8 years?
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