Refinance 190K from 15Y @ 5% to 10Y @ 3% - Closing Costs 7K

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peterjon
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Joined: Mon Jul 16, 2012 11:51 am
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Refinance 190K from 15Y @ 5% to 10Y @ 3% - Closing Costs 7K

I have 12 years and 190K left on a 15Y loan at 5%. Bank is offering me a 10-year note at 3% with closing costs of 7K. FICO is 780. Loan to value 20%.

The question is, will I have the same effect by taking the 7K and making a one time payment. Are there any calculators that can help me visualize this better.

Thanks,
Peter

p.s.: Because of an issue with my original "Consolidation Extension and Modification Agreement", I can only do this through my original bank. Too long of a story to break down here. Please help me sort out whether the deal is feasible or not.

DaveInPgh
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Re: Refinance 190K from 15Y @ 5% to 10Y @ 3% - Closing Costs

RRGleason
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Re: Refinance 190K from 15Y @ 5% to 10Y @ 3% - Closing Costs

Yay math!

Assumption: the payment for 190K for 12 years @ 5% is \$1757/month.

Option A: Pay an extra 7K to current mortgage, continue with scheduled payments afterwards.

Months until paid: 137 (11 years, 5 months)
Interest paid: \$57,525

Option B: Refinance to 10 year @ 3%. New payment \$1834/month.

Months until paid: 120
Interest + Fees paid: \$30,159 + \$7,000 = \$37,159