Tuesday, July 6, 2010

How I Won a $50,000 Jackpot by Re-Financing My Home (And how you can too if you have a 5-7 year old mortgage)

c184051_m I just won $50,000 today!  (‘Kay, not really, but I did SAVE myself $50,000 over the next 15 years)

15 year mortgage rates are at 4% today. 

I was shocked at how low they were and decided to do a little investigating “just to see” if I could manage converting my 30 year loan to a 15 year one.  If you’ve been in your loan for 5-7 years, and are at an interest rate of 6-7% you should run your numbers and see if a 15 year mortgage can save you a boatload of interest and knock significant years off your loan.  Bet you it can!

Check out the tables below:

For a loan amount of $250,000

Years Rate Monthly Payment Interest over Life of Loan
30 Fixed 6% $1498 $290,000
15 Fixed 4% $1849 $83,000

Now, lets take a look at these numbers if you’ve had your mortgage for 5 years…

By remortgaging the remaining balance, you’ll have a monthly payment of $1720, save $134,000 in interest, and pay off the original loan in 20  years as opposed to 30 years.

 

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HUH?

I seriously expected you to follow all that?

 

 

 

 

Let’s do it again for a loan amount of $150,000:

Years Rate Monthly Payment Interest over Life of Loan
30 Fixed 6% $900 $173,000
15 Fixed 4% $1109 $49,000

 If you’ve had your mortgage for 5 years…

By remortgaging the remaining balance, you’ll have a monthly payment of $1035, saving $73,000 in interest, and pay off the original loan in 20 years as opposed to 30 years.

If you really study these numbers, the difference in the monthly payment really isn’t too enormous when compared to the amount of interest you’ll be saving, as well as the years you’ll knock off your loan. 

If you’d like me to run some numbers for you, feel free to shoot me an email, call me out on Facebook, or hit the mortgage calculator yourself! 

Our in-house Mortgage Rep, Tom Fullen, hooked me up today, and always does a great job.  I used Tom even before I started to work for Prudential and he always gets me a great rate, and gets the loans done.

4 comments:

Tina said...

Wow! What a way to put things in perspective. I love it!

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joven said...

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