I am bit confused if refinance is a good idea if my purpose is to lower down my down payment because it basically reset the payment clock to 0. I calculated that for my mortgage, with the new refinance rate, even calculating the inflation rate. All in all I am paying 50k more in today’s money. I get 250 dollars less each month. Rate fall from 3.3 to 2.3. Can anyone tell me if this is a good idea?

like
Posting as :
works at
You are currently posting as works at

Let me try to clarify - when you refinance, in the simplest sense you are originating a new loan, which the vast majority of the time, has a lower interest rate. You’re weighing whether the interest savings outweigh the fees and ALSO as you mention, resetting the term. The questions you might ask yourself are:

If I was previously in a 30 year mortgage, could I go to a 15 or 20 year mortgage now? This might further drive down your interest rate. The other question is: could I make a commitment to pay additional above the payment each month if you refinance as a 30 year? If there is no prepayment penalty, and you do an extra $100 or $150 a month? What is your monthly savings from refinancing? If you can pay the same amount monthly, more will go towards principal and you will pay it off sooner.

likesmart

Why are you paying 50k for a refinance?
If points, points are never worth it

like

Thanks!

How far into your loan are you?

Not all refinances are 30 year products. I was able to get a 29 year loan that had a special “promotional rate” through one company that was cheaper than a 30 year loan anywhere else. I actually ended up refinancing again about 8 months later and got a 28 year loan, so I haven’t lost any time.

There’s also an option to prepay principal, which can drastically reduce how much time you’re paying the loan. Adding an extra 5% or 10% of the principal you’re paying down each month can often reduce 5 to 7 years off of the life of the loan, especially if you’re paying extra in the first few years where the loan is interest heavy.

2.3% is a great rate, especially if you aren’t buying any points! If you’re more than a few years into your loan, you may want to ask if there is a 20 year or 25 year loan rate that makes sense to help keep the time shorter than the standard 30 year term.

like

I agree with EY1. Calculate your total interest expense if you refinance and keep making the same payment you make today. That will shorten your term and should save you more. I refinanced to a 10yr loan this year at 2.125 no points. The 10yr vs 15yr saved 1/8th.

like

Related Posts

I work with small business retirement plans and the profitability of different companies is amazing to me.
I have a small dog food company and a local flower shop, each with 2 owners, who max out their 401k every year for both owners, plus 25% profit share.
Who knew there was that much money there?

like

How difficult to switch from growth investing to mid market buyout as a VP?

like

Tech has dipped a good amount this month ever since the rotation into value. Is this a good time to slowly accumulate tech holdings (FB, Microsoft, Apple to be specific)?

like

Hello, I’m looking for help filing my tax information for a new job. I’ve been in nyc for close to two decades, and am moving from the city for a new job. I’m wondering what to claim.

like

I got 900k in Tesla options. Leaps:
1000 2023
700 2022

Who with me?

like

What is a good credit card to get for travelling benefits? (I’m in Australia if that makes any difference)

like

Live in HCOL city with 2 kids. Have been rentvesting in smaller lower cost cities and getting good yield, moderate growth. Property is ridiculously priced in my city, can’t get anything for under $1.8-2.2mil and don’t have much of a deposit. but rents are going up too. Does it make sense to continue rentvesting? We will have to stay in this city for kids education for next 12 years….

like

Can someone explain the Roth conversion ladder to me like I am idiot? Which is what I am 😎.

HHI over $350k and can’t do backdoor Roth because I have tIRAs…

like

When people talk about their saving rate. Is it based on “gross” or “net” income?

like

Does anyone use any budget tracking apps? If so what do you recommend?

Hey guys how am I doing financially...

34 yo
NYC
Salary 105k
Saving 31k
No 401k
Mortgage 274k and house worth 730-830k
Rent out garage for 275 monthly

I’ve just been focusing on paying off the house

like

Incoming MBA, I have my tuition paid for and rent covered (I will be an RA). So the only thing I need to pay for is food and entertainment. Do you think 20k is enough to last me through the 2 years? I will make a little money interning in the summer, so that would be a safety valve if I blow through the 20k.

Or… should I take a small loan?

Hi IBMers,
Do we need to mandatorily submit the rental agreement, rental proofs and landlord's PAN to claim HRA for any amount?
Please help me with your suggestions. Thanks in advance 😊

like

Can federal contractors get public service loan forgiveness? Probably not right?

like

New to the game, which of the main coins are good buys at these prices?

How do I start a brokerage account at Fidelity (just using that since my kids 529 and my 401k are there)? Do I need to call them? I just don’t want stuff sitting in my checking account and my student loans are now paid off so I will end up netting more every month…any advice on what to do would be greatly appreciated. Side note - I won’t be day trading or anything…I just want to give it to a brokerage firm and let them do their thing.

like

Going back and forth on selling my current home. I received a pre-approval for a single family primary residence for $400k with $100k for down payment and closing. My mortgage would be around $2500 a month with a conventional loan. The $100k will come from my house currently being sold. I can afford the payment just need to know is the monthly mortgage payment typical for a home in today’s market.

like

Are you generally home free once you close on a home? If you wanted to quit your job and go back to school and could still keep up with payments, would anyone care as long as you pay everything on time?

like

Should immigrants from India do 401 K voluntary contributions given Visa uncertainty? Does the answer change if Employer doesn’t match your contributions?

like

Anybody know any good books/sources on couples finance or balancing financial mentalities? I have a personal finance mentality or character that is save as much as possible, spend as little on myself as possible, spend mainly on things that could appreciate in value. Whereas my gf is all about treating oneself, and living very comfortably, even if it is not sustainable. It doesn't help as well that I make 3-4x what she makes. Its hard to balance these two mentalities

like

More Posts

What's the best restaurant in San Francisco? The one you'd eat at if it was your last meal.

like

I am interviewing for director/group PM roles (10 years product management exp) and I was asked as a second round to go through a “product sense” interview, conducted by a junior PM reading the script. I know product sense is needed as PM (i have recruited many PMs in my life) but it felt quite underwhelming to go through an hour of this … the PM was very nice, but couldn’t answer any complicated question either … is this still the norm for senior processes, is it FAANG legacy or just bad luck?

like

Has anyone here not pursued an extension because client isn’t listening to advice, whitewashes statuses, purposefully misreports (read: lies) despite what data clearly shows, misses deadlines and then just rebaselines dates, etc. because of concern they will fail and try to blame consultants (so reputational risk) and for other reasons (e.g., no value in time billed, other work could be pursued, mental health, etc)?

like

Should immigrants from India do 401 K voluntary contributions given Visa uncertainty? Does the answer change if Employer doesn’t match your contributions?

like

How do I start a brokerage account at Fidelity (just using that since my kids 529 and my 401k are there)? Do I need to call them? I just don’t want stuff sitting in my checking account and my student loans are now paid off so I will end up netting more every month…any advice on what to do would be greatly appreciated. Side note - I won’t be day trading or anything…I just want to give it to a brokerage firm and let them do their thing.

like

Going back and forth on selling my current home. I received a pre-approval for a single family primary residence for $400k with $100k for down payment and closing. My mortgage would be around $2500 a month with a conventional loan. The $100k will come from my house currently being sold. I can afford the payment just need to know is the monthly mortgage payment typical for a home in today’s market.

like

Are you generally home free once you close on a home? If you wanted to quit your job and go back to school and could still keep up with payments, would anyone care as long as you pay everything on time?

like

Happy Halloween, my fellow Tech Pros! I love this Holiday, anyone come up with a creative costume to wear at work?

Does anyone have any recommendations on resources to learn how to create funnels on your own for free?

🇳🇬 Where's the best spot to chop on some correct jollof?

like
like
likeupliftingsmarthelpful

How are power bi projects availability over there?

like

Is asking first year associates to hit 215 billable hours normal?!

like

Cheesecake. It’s Rose Beranbaum’s recipe from her Baking Basics cookbook. Excellent results!

Post Photo
like

And soft pretzels. I’m on a carb kick, apparently.

Post Photo
likefunny

I received an offer and asked about their parental leave. I don't plan on having kids anytime soon but would like to in 3-5 years and hope I can start a long-term career here. Was that a weird question to ask? The company initially responded that they are rewriting it so I didn't get much detail.

likehelpful

Hi! I just moved here and am looking for any recommendations for hair salons (mainly for Asian hair) for cut / color! Let me know if anyone has any recs :)

like

CL Account Managers - I'm curious, what is the size of your book of business (in revenue) and what is your top industry? I'm looking for benchmarking, and all of the research I have done is based off numbers from 2020 or later. Thank you!!

like

Just did a domestic relocation - will the agreement that the Relocation Provider sends be mailed out to my new address?

like

Additional Posts in Personal Investment Chatter

Going back and forth on selling my current home. I received a pre-approval for a single family primary residence for $400k with $100k for down payment and closing. My mortgage would be around $2500 a month with a conventional loan. The $100k will come from my house currently being sold. I can afford the payment just need to know is the monthly mortgage payment typical for a home in today’s market.

like

At what salary did you start maxing out your 401k?

like

Going to get about 80k in bonus at the end of the month. Curious to know where to invest. We are already invested in the market (etfs, qqq, tech stocks), Icurious to know where others are investing in right now other than stocks, crypto and real estate. Looking at long term with medium risk

like

If I have only enough income to invest ~6% (to max company match) pretax currently (working on paying off credit cards I racked up over the years, as well as saving for a ring and house), are regular 401k contributions or roth contributions a better idea?

like

Hi everyone! I’m a young professional right out of college getting into investing and personal finance management. Trying to better understand and educate myself on personal finance and investment strategies. Can someone recommend some recourses (books, podcasts, experts to follow, etc.) where it’s clearly explained for beginners? Trying to make sense of 401Ks, Roth IRAs, emergency funds etc.
Like I’m looking for someone like Dave Ramsey but for investment and money management advice.

like

Looking to purchase a property in CA in the next 12-18 months. I think you can opt out of escrow in CA? How easy is it to opt out and what are the pros and cons? I’m usually on top of things so I don’t like the idea of forced savings. I also like lower monthly payment so I won’t have to stretch. Also for mortgage hunting, brokers are the way to go?

like

My fiancé and I want to open our first joint savings account. Any recommendations, and why? Thank you!

like

I have just been consistently buying Apple, Microsoft, Alibaba, Amazon, and Salesforce for the past year. Any compelling reason to change from this strategy?

smart

Is there a way to buy long-term leveraged positions in the S&P500? Could I just take a long-term loan and then invest the whole portion in S&P500 ETFs?

like

How are you investing your money right now?

like

Thoughts on Lemonade stock? Overvalued?

like

Thoughts on daily recurring investment of $100 on SPY and $50 on VOOG.

Also, what are people's thoughts on doing daily $10 recurring investments in AAPL, GOOG, and FB

like

Has anyone setup custodian accounts for their kids? Are they worth it? Who do you set it up with?

like

If I move from TX (no state income tax) to NC, can I leave my savings account and brokerage address as TX (to not pay tax on interest and dividends) and update credit card accounts address to NC? Or..

like

TVIX for next week?

like

Is NIO a buy ? For the long term ?

like

Any recommendations for fidelity brokerage account for etfs, index funds anything?