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Mortgage Refinance Options

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  • Mortgage Refinance Options

    Loan was taking for $157,950
    Balance today: 120,947.30 at 3.6250%
    Original loan date 07/13/2012
    P&I payment $720.33
    Total interest left $48,195.99

    If I go to a 15 yr:
    $120K loan amount $805.81 P&I
    Total interest $25,045.48
    Refi cost are estimated at $1,400

    It seems like a no brainer to move forward. $85 invested monthly will not return anywhere close to the interest savings on the loan.

    I’m a big believer that if something sounds too good to be true, then it usually is. So just want to make sure I’m not missing anything or what else I should be considering.

    If I can borrow money at under 3% is it worth pulling equity out and invest?

  • #2
    Sounds like a good deal. I would go to a 15 year if you can afford it (if you can swing the extra $85 per month...).

    I would not pull equity to invest. I love not paying off a house when the interest rate is low. But I have a hard line for not borrowing from your house for investing gains. I realize it's conceptually the same as not paying off your loan, but it just crosses some line in my head on another step up of risk. I dunno...
    "Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓