What is your mortgage interest rate? - Page 2

[crunchy_mommy]

Originally Posted by SunRise 

I also recently read that these rates are supposed to stay low until the end of 2014, so there is no rush.

This is good news. Maybe we can work on paying down the principal over the next 2 years and see if we can it down to what the house is valued at. And even if we can't, we'll still be getting ahead. We plan to stay in this home forever so I guess there's time...

[CookiePie]

Ours is 4.875 from 2005....We have not made extra payments, but are getting close to paying off CC debt.  I want to start to prepay each month by doubling my principal based on the amortization schedule, however if I understand it correctly this would change the principal for the next month, and each month would further affect the next.  So I would have to re-calculate each month in order to continue to correctly double the principal.  Am I understanding this correctly?  How do I calculate this?  I've been searching for an online tool but can't seem to find one.  Seems it would be a a PIA to have to call the mortgage company every month to re-calculate.  Has anyone found an online tool or figured out an accurate formula?  Any help would be appreciated! 

[laohaire]

Well, yes, the amount of principal changes each month because it's calculated to be a flat payment, and each month the amount of interest goes down (unless you've made a really bad loan, I guess) and the principal goes up.

Make it a little easier on yourself, if you really want to double the principal every month, settle for just doubling LAST month's principal (which you can find on your statement or logging into your online account). Close enough for government work.

Or, you could not sweat the concept of the doubled payment and simply throw everything you've got at it. Or just add a flat amount every month.

[chiefmir]

We just refinanced last month and got 3.25 on a 15 year fixed (down from a 20 year fixed that had 17 years left on it).  We saved only 10$ a month, but cut two years off our mortgage, which is huge, in the long run.

[~Amy~]

We've got 2.85 at the moment. It's a variable rate.

[CookiePie]

Thanks laohaire, I do tend to over think things!  Do we agree that I should first pay off debt before putting anything extra towards the mortgage?  I'm working hard to finish paying of about $5500 on 2 credit cards.  I believe we will be paid off at the end of the summer.  Then I want to start putting about double on the principle, start a Roth IRA and a vacation fund!  I'm so excited that I finally see the light at the end of the tunnel, it has been a long haul to get this far and once we are paid off I really want to get things in order so that we don't make the mistakes that we have made in the past.

[crunchy_mommy]

Originally Posted by CookiePie 

Do we agree that I should first pay off debt before putting anything extra towards the mortgage?

Yes, that's probably best if you have credit card debt, the interest rates on that can be sky-high, plus what it does to your credit rating...

If you have low-interest debt like school loans, I'd consider paying extra on the mortgage before paying of those debts, though.

[TiredX2]

Originally Posted by CookiePie 

Do we agree that I should first pay off debt before putting anything extra towards the mortgage?  I'm working hard to finish paying of about $5500 on 2 credit cards.  I believe we will be paid off at the end of the summer.  Then I want to start putting about double on the principle, start a Roth IRA and a vacation fund!  I'm so excited that I finally see the light at the end of the tunnel, it has been a long haul to get this far and once we are paid off I really want to get things in order so that we don't make the mistakes that we have made in the past.

Financially, the first thing to prioritize should be your highest interest rate item (assuming you plan on paying them all off eventually).  If you itemize your taxes, remember to take that into account when determining your interest rate on both mortgage and student loans.

Once you are ready to start paying down your mortgage/ starting savings, I would really encourage you to start with the Roth first (depending, of course, on your current retirement investments).  I only say this because once the time passes for saving for retirement (there is a limit each year) you cannot get that opportunity back.  You can always pay additional on your mortgage, though, so that is not a time limitied issues.

It sounds like you're doing great--- good luck!

[CookiePie]

Thanks!!!  I'm feeling very motivated to set some goals once the CC's are paid off!

[nstewart]

Originally Posted by crunchy_mommy 

OK so question for those who did refinance -- did you have to get an appraisal?
The town has valued our property at $80K below what we bought it for. However, that's just based on current home values in our area, they haven't set foot inside our house. We've done a major remodel, virtually every room in the house was redone, though the bedroom is still a little unfinished. We put in a driveway, too. The kitchen remodel was BIG and makes the house seem much better. So I'm guessing we'd appraise at least a little higher than what the town has us valued at... but I doubt we'd get all the way up to the amount we owe, since local housing values have sunk so much. And I don't believe we're eligible for HARP. So how do we do this? Is there a way around the appraisal, any lenders that don't require it? I'd hate to spend time & MONEY on this process and not be able to do it in the end... but I want the lower interest rates too!!!

I'm in Canada so the answer may not be helpful.  We JUST refinanced from a 3.9% variable to a 2.9% fixed rate (locked in for 4 years).  We didn't have to get an appraisal or anything like that done.  We can still make 1 extra payment per year on the mortgage (for as much as we want) without penalty.  And since we have a sizable home line of credit balance (used to reno the house) we're going to prioritize paying that off ahead of the mortgage anyway.  It also did not cost us anything to do the refinancing (no charges, etc.)

[nstewart]

Sorry, just realized I said variable.  We had a 3.9% fixed rate, open mortgage.  We now have a 2.9% fixed rate, closed mortgage.

[EmsMom]

Originally Posted by nstewart 

Sorry, just realized I said variable.  We had a 3.9% fixed rate, open mortgage.  We now have a 2.9% fixed rate, closed mortgage.

You have a 2.9% fixed rate???  Amazing.  I have never seen a rate that low..  U.S.?

[nstewart]

Originally Posted by EmsMom 

You have a 2.9% fixed rate???  Amazing.  I have never seen a rate that low..  U.S.?

No, Canada.  Royal Bank of Canada.

[EmsMom]

Originally Posted by nstewart 

No, Canada.  Royal Bank of Canada.

That would explain it!

[lmonter]

We refinanced to 4.375% or so this year.  No closing costs, just had to chip in for the new escrow account since our taxes went up a little.  Had been 5.375 or something before, I can't remember.  It was through Chase (they bought out the bank we'd been with before), and while Chase and all their employees we dealt with pretty much sucked, it happened.
Only drawback was that the refinance kicked the mortgage back up to 30 years (they don't do 15 or 20 year loans, boogers), so we've thrown some extra at the principal already to take care of that.  We *are* having a mortgage burning party by the time one of us turns 40yo, that's all there is to it.  :D

Oh, we did look at refinancing through our local bank (that we have accounts with), but they still wanted closing costs.  Dumping out an extra few grand didn't appeal to us when our rate wasn't all that bad (and we were 8 years in), but for some with bigger mortgages or whatever, it could be worth it.

[nstewart]

Originally Posted by lmonter 

We *are* having a mortgage burning party by the time one of us turns 40yo, that's all there is to it.  :D

Oh my goodness, I love this idea!

[sewaneecook]

We refinanced a year ago and went from 5.875% fixed rate on a 30 year loan (20 years left to pay) and we're now down to a 3.6% fixed rate on a 7 year loan (with 6 years left to pay).  We're paying about $500 more per month than our original mortgage, but only about $200 more than we paid each month since we paid extra anyway.  We hope that the refinance will allow us to pay off our house in about 4 more years.  The extra that we're saving with the lower rate was well worth the refi charges (about $1500, appraisal included)! 

[StarJune]

2.99% fixed rate. It is up for renewal in July and here in Canada most terms are 3 or 5 years. It was a pleasant surprise when I called the agent after getting the letter yesterday. I had planned to shop around for the best deal but this is great. I also confirmed that I can continue to prepay at 20% and with bi-weekly payments which is taking years off the mortgage. Very excited .

[crunchy_mommy]

Oh man... I wish I lived in Canada.

[Sharlla]

can you find 50k houses in canada?