10 Year Mortgage Rates [mortgagerefinance-101.blogspot.com]
Question by jebfowler: What's better, paying ahead on our 30 year mortgage or refinance to a 10 year mortgage? current house payment is 650. What's better financially, paying an extra 500 per month on our 30 year mortgage or refinancing to a 10 year mortgage and paying 1150 per month? We are 3 years into our 30 year mortgage. the 30 year has 5.75%... and i used current rates for the 10 year. Best answer for What's better, paying ahead on our 30 year mortgage or refinance to a 10 year mortgage?:
Answer by rlc_60504
What are the interest rates in both scenarios?
Answer by siouxxib
It all depends what you overall interest payment would be, but the advantage you have now with the 30 year mortgage is that if some time in the future if things get tight and need money for other things, you could fall back to the 650 payment. You could also use some of that for other investments, but then it depends how much return you will get on that investment as compared to how much interest you will save with an early payoff..
Answer by raringvt
This is really going to vary based on your circumstances (credit score, home equity, etc). Talk to a mortgage broker to help figure it out. Be wary of anyone who instantly says refinancing will be best--they are just trying to get a commission on your refinancing.
Answer by heybulldog
Well, if you pay an extra 500 on the 30yr. You would pay it off in about 15 or 16yrs. If you refinanced for a 10yr loan. You would pay more than the 1150 a month. It's best to pay it off asap if you have the money and no other debts
Answer by hooterville
Since both interest rates are the same, it should be a wash. I'd save the refinancing fees and pay the extra $ 500 on the present loan. Make sure they apply the extra money to principal and not future payments. You also have flexibility in case something happens
Answer by qman
Keep the 30 and pay extra principal. Too many fees with refinancing and you won't get a better rate.
Answer by goofycollector
I would simply pay the additional $ 500 each month as principal. There is no sense in paying the fees to do a refi. Don't call a broker, it's in their best interest that you refi, not yours. Be disciplined and pay it down aggressively now, while you have the money. Most mortgage companies have an amortization estimator on their sites, you can put in what extra you want to pay and it will forecast out when you will be done with it . I did that and try to send every last cent to my mortgage company after all the bills are paid, sometimes it's a lot, sometimes it's not (just lost my job), but watching what extra principal payments does to the life of the loan makes me feel better when I send it off. Some people will say take that $ 500 and invest it as you will make more on your money over the long term. You have to know what's right for you. I'd rather have a paid off house then watch my money go up & down every day. At least that way, nobody will ever be knocking on my door to foreclose. Good luck, and good plan trying to pay it off early.
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Buying a home is one of the biggest dreams of all of us. But most of us are not born with silver spoons, and as such, we have to depend on financial institutions to find the money required for making such an expensive purchase. You know that mortgaging, lending and related activities are the backbone of our economic services. As such, all money lenders are vying with one another in order to attract potential customers and thereby increase their profit base.
Banks would lend you the money against the mortgage of the property you are buying. The monthly premium and the term of the loan would be determined after considering your repayment capacity. The rates of interest charged by different lending services also differ. The loan term can go up to forty years in some cases, coming down to around ten years.
A 10 year mortgage is the most beneficial if you have the repayment capacity.
The biggest advantage is that you are free from the yoke of your financier in just ten years whereas a loan term of more years can prove to be financially heavy on you. The interest you pay also is comparatively less and less biting. The flip side is that your monthly installment would be much higher. Short term mortgage rates are the best option if you are planning to upgrade in a short time span.Paying off your debt quickly is highly desirable in the current economic scenario as it would save you a lot of extra payment. A quick comparison of a ten year mortgage with a longer duration mortgage would prove that ten year mortgages are the best if you can save the extra money for paying off. This is why most borrowers prefer the ten year mortgage scheme. Your equity value grows phenomenally faster and you would gain peace of mind earlier.
Another major advantage is that the amount you pay as interest in a ten year agreement almost doubles in a fifteen year mortgage. The difference would only go up greatly as the loan term increases.However, never go for short term mortgages if you feel that you cannot afford it. Longer term mortgages are much more manageable for most people. However, for ensuring fast growth of your equity, gaining quick freedom from debt and subsequent tranquility in life, there is no other option but to go for a ten year mortgage plan.
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