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To pay off or not pay off...that is the question
So i got a call from the lending bank im going through for my mortgage. Yesterday they called me to tell me that i need to lower my School loan payment. We would then become eligible for a different percentage rate of 3.75% on our home mortgage but...the mortgage would extend for another 10 years.
So here are the pros - Lower mortgage payment, lower school loan payment, more money to actually do stuff instead of being broke all the time with house bills..mortgage would drop to about $1300 a month, almost a full interest point lower on my mortgage (about 20,000 less overall on my mortgage over time)
Cons- 2 extra years to pay on my school loans (not a huge deal...i only owe 9K), 10 more year to pay on my mortgage.
So i am toying with paying off my school loans completely...with a little help from my grandfather...and pay him back. But i also dont want a 40 yr mortgage. ugh.
anyone heard of anything like this before??
Re: To pay off or not pay off...that is the question
My Blog:Through My Eyes
we dont have a pre-payment penalty clause in our paperwork..so we can make extra payments to the principle of the loan over time. It will actually knock us back down to a 30 year or close to it if we make an extra 2 payments a year on our mortgage...which if we pay what we should be ($1700 without the program) we will actually make about 2 and a half payments more a year. They say making 1 monthly payment more a year actually takes off about 5 yrs on the mortgage,
I dont want to refinance in a few years.....at the percentage rate we are getting with this new program... we will probably never see a percent interest this low again. and it is doubtful we will see substantial equity in the house for at least a few years since we are overpaying slightly. (barring the market staying this way)
I agree with PP.
If you can get yourself a more manageable mortgage payment, you'll be a lot less stressed month-to-month. It would also give you the ability to pay more towards your principle over time, knocking down the 40 year term.
I agree with this.
Just looking at the dollars and sense here and I think you should be taking the refi on your mortgage. Just add up your interest in either scenario and take the lower one.
There's nothing wrong with extending your mortgage. Actually its a pretty good idea because rates will only go up. You might as well lock in debt now at the lowest rate possible.
*sigh* that was my hubby, he's so cute when he gets a finance question :-)