[USAmma]

We currently have a house which we have owned for 10 years. We still owe $105,000 on the loan. We refinanced a few years ago to get a lower rate at 5.5% which is pretty good. However we have the chance to go for a 4.5% rate now. Dh wants to go for it but we need to do more research. There will be fees to refinance. Do you think it's worth it or should we just keep our current loan?

BTW I hope to be admitted to nursing school soon. When I graduate I plan to pay $20,000 of my salary towards the mortgage to pay the house off in 5 years if all goes as planned. So again is it worth it to refinance? We could get a lower payment every month, etc.

Help us think this through. Thanks!

 

[Knittin' in the Shade]

it's hard to say without knowing what your closing costs associated with the refi would be, and if there are pre-payment penalties on the new loan. IF there are penalties, you won't be able to pay that 20K in one shot without taking a big fee hit.

 

[McFeelings]

There's no way to say for sure until you run the numbers. I do know that a serious committment to prepay your mortgage needs to be considered. For example, we are on track to pay off our home in the next 7 years and even though we could get a full percentage point or more off our current interest rate right now it STILL doesn't make financial sense for us to refinance. While our required monthly payment would go down, over the next 7 years we'd only save about $400. Totally not worth the hassle to me.