Refinance or not?

MrsStubbs

My bank has 10yr loans for 2.875% and 15yr for 3%. Right now we have a 15yr with 3.75% and only about 8yrs left if we keep up the same payments. Part of me wants to go for the 10yr because we are not paying enough interest to even claim it on our taxes so why not just pay it off as fast as we can. 

What would you do? Either way the payment would be less than we pay now because I make extra principal payment.  

lildevil968

I say do it. We are in the process of refinancing our house on a 30 yr fixed, and it would save us around $300 a month on our payment.

MirandaHobbes

Depends on closing costs and how much you want your payment to be. We refied through the federal Heart (Hart?) program and reduced our payment by about $400 a month and our closing costs were about the same as 1 month payment- but it all evened out because of timing we "skipped" a monthly payment, if that makes sense. Our goal in doing this was to lower our monthly payment so it was great for us and because it was this federal program we didn't have to get an appraisal. If we needed an appraisal we wouldn't have done it because we're probably underwater with property values sinking.

ccm1203

I would go to bankrate.com and use there calculators.  If you expect to pay your mortgage off in 8 years currently I suspect it might be more expensive to refi.

KatieLG04

We are, but it is knocking our mortgage down by 7 years, giving us a 15 year loan instead of our current 30 year.  Our payments will be staying almost the same, so it's a no brainer.  Hopefully it just all works out because we've had some job transitions lately which have complicated this process.

kg_08

Since the payment would be less either way, I say definitely do it.

We actually refinanced this past summer and it was great! Saving about $80,000 over the life of our loan.

Would you still make higher payments to be done in 8 years instead of 10? Another thing to consider (if you're not doing it already) is to make bi-weekly payments instead of monthly payments. That's saving us another big chunk of money and taking a couple more years off our loan.

Bride2b2004

It depends on closing costs.  Can you get a no cost refi?  If so, than definitely refi.  If not, take the amt of interest you expect to pay (8 yrs, right?) and compare that to the closing costs + interest under new loan over 8 years to see savings and decide if it is worth the trouble of refi.  

Lucky you only 8 more years of mortgage!  Great job.