Are you wanting to cut the down the length of your loan and pay off your home loan faster? With current interest rates being so low now could be the perfect time to refinance into a 15-year loan.
A previous client Marty decided to do just that. Marty planned to retire this year and wanted to look into refinancing so he could pay off his mortgage faster. His plan was to leave his property to his children as inheritance one day.
Marty had been in his current loan for 4 years and had 26 years remaining. He was in an FHA loan with a low rate of 3.5%. However, being in an FHA loan means he is required to pay mortgage insurance for the life of the loan. His payment was $1,500 a month and the total interest and mortgage insurance remaining to be paid over the life of the loan was $187,476.
We were able to refinance Marty into a 15-year loan at 2.999%. This shaved 6 years and $110,000 in interest and mortgage insurance costs off his loan. His payment did increase by $30 a month; but Marty felt this was well worth it to save $110,000 long term.
Refinancing into a shorter loan term is a no brainer and could be the answer you need to save you money in the long run of your loan. There is no reason not to refinance into a 15-year loan, with rates this low it will only benefit you in the end.
Refinancing with Custom Terms:
It does not always work that you can refinance into a 15-year loan and drop your monthly payment, but sometimes it can happen; and with how low interest rates are today it is happening a lot more often.
Another client of ours bought his home in October 2019 at 3.75% rate on a 30-year fixed with a monthly payment of $1,119. For this particular loan, the total interest paid over the life of the loan was to be $134,443. Always looking for a way to save money monthly, he decided to refinance to drop his monthly payment.
After running the numbers, he chose to do a 29-year loan instead of the 30-year term so not to start the loan completely over or reset the mortgage. From there we were able to get him into a new rate of 2.82%, with a new monthly payment of $1,021 and lowered his total interest to $96,376. The new loan will save the client about $100 each month. His total interest savings will be a little over $38,000.
The client is looking forward to saving month each month as well as saving on accrued interest payments in the long run.
To learn more about what we can do for your loan please send me at email at firstname.lastname@example.org, or feel free to text or call me at 801-206-4343.
I would love to run some numbers and see if we can refinance you into a 15-year loan or custom term and lower your monthly payment from what you are paying today.