Record low mortgage rates have many Texans considering refinancing their Texas home loans. After years of diligently paying down a mortgage it’s understandable that some homeowners are wary of starting the clock over again with a refinance into a new loan with a 30 year term.
Because rates are currently so incredibly low you might be surprised to learn that the difference between the monthly payment on a 30 year loan taken out a few years ago and a 15 year mortgage at today’s TX mortgage rates could be less than you might think. Factor in the significant interest savings that come with paying off the loan 15 years sooner and a 15 year fixed rate mortgage starts to look pretty attractive.
Here’s an example scenario to illustrate how the numbers could work (not an offer to lend or advertisement of currently available pricing):
$200,000 loan taken out in December 2008.
Continue 30 Year Mortgage at 5.10% (The average 30-Yr FRM pricing the week of December 31, 2008 – with 0.7 points.)
Monthly Payment (Principal and Interest only): $1086
Remaining Interest: $160,986.98
Refinance Balance to 15 Year Mortgage at 3.24% (The average 15-Yr FRM pricing the week of December 29, 2011 – with 0.8 points)
Monthly Payment (Principal and Interest only): $1340
Total Interest: $50,369.42
Monthly Payment Increase: $254.18
Interest Savings: $110,617.56
Would you like to see what these numbers might look like for your scenario? Give us a call at 972-591-3097 for a free consultation.