Bummed Trying to Refi

Mom987 · September 2013

We got a 30 year 4.5% mortgage in 2010. Awesome rate that year. We just couldn't afford a 15 year mortgage at that time (the 30 year monthly with taxes and insurance was already 30% of our take home pay). Now we can afford a 15 year, and are trying to refinance, but our appraisal won't be within the amount required, based on what we owe, even though we've paid down about $25k, homes have been selling for about $25k less than ours). We also tried a streamline FHA (our original is FHA) but they won't allow our principal/interest to increase *even though we want it to, in order to get a 15 year.*

Anyone else?? Suggestions?

Thanks!

Mom987 · September 2013

Oh and interest rates are going back up, big time, so we missed our chance it seems.

mindy2415 · September 2013

Can you not just pay extra each month that would still allow you to pay off your 30 year mortgage in 15 years without refinancing? That is what we are doing. We got our 30 year home mortgage in November 2010 at 4%. We originally wanted to do a 15 year mortgage but I was still in college and didnt feel comfortable with the obligation to pay around $500 extra each month as I didn't have a full time job yet and was about to get married. We looked into refinancing a year or so ago to a 15 year mortgage and the additional closing costs and barely lower interest rate wasn't worth the hassle for us. Our mortgage loan allows us to make additional principle payments to pay off our loan sooner without penalty, we decided it would be just as good to stay with our 4% interest rate and adjust our monthly principal payments to get the house paid off in 15 years. I created a spreadsheet that Allows me to see exactly how much interest we are saving each month when i make the additional principal payment. I always get excited knowing how much interest we are saving! Also, if for some reason we ever get in a bind with finances, we can always resort back to only paying only the mortgage required on the 30 year loan instead of being forced to pay the 15 year loan.

CuriousKiddosMama · September 2013

I agree with PP- no biggie, just prepay the principal. It doesn't make any sense to refinance just to go to a 15 year mortgage especially if your interest would be going up in order to do so! Just make 2 mortgage payments each month- one your regular payment, and one you designate through the bank as principal only.

Erikan73 · September 2013

Just make sure if you overpay on your mortgage that you indicate the extra is to be applied to the principle.

Mom987 · September 2013

Yeah we definitely pay extra, but every month soo much still goes to interest first, since not every month we'll have that much more, so it starts over each month. We still tend to believe that if it is a 15 year, we instantly shave off 12 years, and we would hit the principal THAT much harder every month.

Mom987 · September 2013

mindy2415 said:
Can you not just pay extra each month that would still allow you to pay off your 30 year mortgage in 15 years without refinancing? That is what we are doing. We got our 30 year home mortgage in November 2010 at 4%. We originally wanted to do a 15 year mortgage but I was still in college and didnt feel comfortable with the obligation to pay around $500 extra each month as I didn't have a full time job yet and was about to get married. We looked into refinancing a year or so ago to a 15 year mortgage and the additional closing costs and barely lower interest rate wasn't worth the hassle for us. Our mortgage loan allows us to make additional principle payments to pay off our loan sooner without penalty, we decided it would be just as good to stay with our 4% interest rate and adjust our monthly principal payments to get the house paid off in 15 years. I created a spreadsheet that Allows me to see exactly how much interest we are saving each month when i make the additional principal payment. I always get excited knowing how much interest we are saving! Also, if for some reason we ever get in a bind with finances, we can always resort back to only paying only the mortgage required on the 30 year loan instead of being forced to pay the 15 year loan.

Is there a formula or spreadsheet that works "backwards," like if I say "I want to pay it off in 15 years, or 10 years" that tells me exactly what each month will look like? I've definitely seen a bunch of those calculators online, but haven't really honed in on one, but we do pay extra towards principal when we can.

Mom987 · September 2013

Thank you for your responses everyone.

mindy2415 · September 2013

I can post my spreadsheet on here in the next few days for you to look at. The file is located on my computer and I usually check this website in bed on the IPad. Hopefully it will help you out! I know I personally like it as do several of my clients. It's created in Microsoft Excel. Hopefully I can post those types of files on here. The spreadsheet also shows you how much time (months) you have shaved off the loan so far based on the extra payments that have been made which thrills me even more!

HoneyBee973 · September 2013

I believe bankrate.com has a calculator that you can play around with numbers, etc.

Mom987 · September 2013

mindy2415 said:
I can post my spreadsheet on here in the next few days for you to look at. The file is located on my computer and I usually check this website in bed on the IPad. Hopefully it will help you out! I know I personally like it as do several of my clients. It's created in Microsoft Excel. Hopefully I can post those types of files on here. The spreadsheet also shows you how much time (months) you have shaved off the loan so far based on the extra payments that have been made which thrills me even more!

Just seeing this. Thank you!! That'd be interesting to check it out and personalize.

Bummed Trying to Refi

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