The Easiest Way Most of Us Can Save Thousands of Dollars
Posted in Mortgages, Personal Finance | 3 viewsby Bob Lotich
If I told you that you could spend a few hours of your time and it would translate in to thousands or even tens of thousands of dollars saved – would you be interested? Well, refinancing is one way that many of us can do that.
Recently I have been looking into refinancing again since rates are still very good. In my case, I am paying a 5.5% rate on my mortgage and from comparing some quotes I can see that I can easily refinance to a 4.5% rate (or lower). 1% may not seem like a lot, but that 1% difference will save us $171/month on our mortgage payment. This will save us over $2000/year! And over $55,000 for the life of the loan. Not bad for just a few hours worth of work!
Assuming average closing costs being about 2-3% of the loan amount we would break even sometime within the 2nd year.
The thing about refinancing is that it can feel overwhelming and complicated. There are a bunch of closing costs and you while you can and should get a good-estimate from prospective lenders, you still aren’t likely to have all of the exact numbers to do the calculation.
But, if you are planning on being in your home for a while and you see that rates are 1% or more below what you are currently paying, you should at least spend some time figuring out how much you could save.
I mean seriously, if you can spend just a few hours and save thousands of dollars a year for the length of your loan, isn’t that a better investment of your time than watching American Idol?
Homework:
1. Check the rates in your area to see how they compare to your current rate.
2. If you find a 1% difference and plan on staying in your home at least 5-10 years, use this calculator to see how much money you can save.
3. Find a few mortgage lenders and ask them for good-faith estimates of their closing costs. Pick a good one, ask questions until you are comfortable, and do something smart with all the money you are going to save!
About the author: Bob Lotich enjoys dark chocolate, paying off debt, giving, Foosball, loose-leaf tea, helping people succeed, learning, anything God created, playing guitar, Philippians, excellence, Chick-Fil-A, and making his wife smile. He started ChristianPF in 2007 and Co-Founded Blogging Your Passion in 2011. Find him on Facebook & Twitter.
Courtesy: Christian Personal Finance
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Investment, Lenders, Mortgage, mortgage lenders, mortgage payment, refinancing
