All Forum Posts by: Hunter Jordan

if you are asking random people online what to do, you might want to rethink your life

I don’t understand how your outstanding dropped from 199K to 173K. In both cases you are going to a higher rate which will make your payment more expensive. Except for some unexplained reason you are using a lower outstanding amount. 

I wouldn't refinance. Wait until rates are better for sure. 

 Thanks for sharing! I learned quite a bit from this post. I think refinance does make sense in your case, and I would do 20 years. 

Loan 1

• Rate: 5.00%

• Monthly Payment: $1,372

• Time Left: 18.5 years (222 months)

• Estimated Outstanding Balance: Approximately $198,800

• Total Payment: About $304,584

• Total Interest (approx.): ~$105,800

Loan 2

• Rate: 6.125%

• New Balance: $173,000

• Monthly Payment: $1,252

• Time Left: 20 years (240 months)

• Total Payment: About $300,480

• Total Interest (approx.): ~$127,480

If you increase the payment on Loan 2 to $1,372 per month (matching Loan 1’s payment), you’ll be paying an extra $120 each month toward principal. Using a rough amortization calculation for Loan 2—with a new balance of $173,000 at a 6.125% annual rate (≈0.5104% monthly)—this higher payment would reduce the term from 20 years (240 months) to roughly 203 months (about 16.9 years).

In numbers:

• Original Loan 2 at $1,252/month for 240 months:

Total payments ≈ $300,480; Total interest ≈ $127,480.

• Loan 2 with $1,372/month:

Estimated term ≈ 203 months; Total payments ≈ $278,000; Total interest ≈ $105,000.

You need to double check the numbers as I'm not a loan professional. But it seems with the same amount of payment, refinance would allow you to pay off earlier..

 Perfect breakdown. 

Yes then I see why it would make sense for you to refi. The seller is basically discounting the original note and you are paying him off through the refinance.

So if I am understanding this correctly you are refinancing a seller financed mortgage into a conventional mortgage? How would you be gaining $26k in equity? Wouldn't that just mean you are paying the $26k at closing since the loan you are paying off is more than the current loan you are qualifying for? 

I am trying to wrap my head around this. Why not just pay down your loan more aggressively? Shortening the loan term may make sense if you are going to reduce the interest rate as well. In this case, you are just getting into a higher rate and paying closing costs. 

I am trying to wrap my head around this. Why not just pay down your loan more aggressively? Shortening the loan term may make sense if you are going to reduce the interest rate as well. In this case, you are just getting into a higher rate and paying closing costs. 

I would not refinance into a higher interest rate - I would keep the existing loan if you can afford the payments

you also will have closing costs invoked to add to the new loan which again does not seem to be worth it in my opinion