I’m 56 years old. I owe about $ 117,000 and I’ve got 21 years left on my 6 % loan.My house is worth about $ 235,000.
Should I refinance my mortgage loan?
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Golden age rule:
You do not want any type of mortgage or car loans the day you retire.
Obey that rule.
Now, set a plan.
You may not need to re-fi since the re-fi costs may be about $ 5,0000.
You’ll have to do the math.
Pay as much principal as you can, then work the numbers.
Do you have any cash in cd’s or mutual funds in a taxable account?
Set a 9 year plan to pay off your home if your kids out out of college.
If you re-fi, make sure its not more than a 10 year mortgage.
Last thing you want is a $ 1,000 mortgage payment when you turn 65.
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It depends on what you are trying to accomplish with the refi. If you want to take cash out, then now is as good a time as any.
If you want to lower your payment, then probably not. The reason is that even though you might get a 1% lower rate by refinancing, that will only save you about $ 100 a month in interest, but will cost you thousands of dollars in fees to refinance.
If you need to drastically lower your payment by stretching this $ 117,000 out over 30 years, you could lower your principal and interest payment to about $ 630 a month (taxes and insurance are higher, of course). If you need to do that for budget reasons, then it is an option, and certainly better than the fees for a reverse mortgage. Just keep in mind that it means your house will not be paid off until you are 86 years old.
I believe your best option (and probably only) would to look at refinancing into a 15yr mortgage.
If you borrowed 120,000 (3,000 towards closing costs) your monthly principal & interest payment would be 895.
Compare that to what you’re paying now. If its affordable it makes sense because you would save considerable money on interest, reduce mortgage payments by 6 yrs.