Comments on: Refinancing: What You Need to Know (Even Before You Own) http://www.moneyunder30.com/refinancing-need-know-before-buying Simple, Honest Financial Advice Thu, 09 Feb 2012 22:53:06 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Bret http://www.moneyunder30.com/refinancing-need-know-before-buying/comment-page-1#comment-2684 Bret Tue, 21 Jul 2009 16:49:23 +0000 http://www.moneyunder30.com/?p=2273#comment-2684 M. Wanzer, There are a couple of reasons people refinance to a shorter term. First, when they are refinancing a "seasoned" loan that they have been paying on for years, they don't want to go back to a 30 year loan and repay all of that interest. Second, they can usually get a lower interest rate for a 15 year loan than a 30 year loan. Finally, folks approaching retirement don't want to be paying a mortgage when they are retired, so they opt for a 15 year loan. (This is what my folks did.) Having said all of that, I am a big fan of getting a 30 year loan and paying extra every month. You can save a ton of interest and cut years off of your loan. But, if you get sick or laid off, you don't have to cover a huge monthly payment. I'm paying off my house in 20 years. M. Wanzer,

There are a couple of reasons people refinance to a shorter term.

First, when they are refinancing a “seasoned” loan that they have been paying on for years, they don’t want to go back to a 30 year loan and repay all of that interest. Second, they can usually get a lower interest rate for a 15 year loan than a 30 year loan. Finally, folks approaching retirement don’t want to be paying a mortgage when they are retired, so they opt for a 15 year loan. (This is what my folks did.)

Having said all of that, I am a big fan of getting a 30 year loan and paying extra every month. You can save a ton of interest and cut years off of your loan. But, if you get sick or laid off, you don’t have to cover a huge monthly payment. I’m paying off my house in 20 years.

]]> By: M. Wanzer http://www.moneyunder30.com/refinancing-need-know-before-buying/comment-page-1#comment-2685 M. Wanzer Tue, 21 Jul 2009 11:56:14 +0000 http://www.moneyunder30.com/?p=2273#comment-2685 Question, You listed "shorten the term of the mortgage" as a possible reason why someone may want to refinance, If someone can afford to shorten the term of their mortgage, why would they want to refinance. If they don't have a mortgage with a early repayment penalty, why not just pay more than the required amount every month? Won't it work out the same anyway? Question, You listed “shorten the term of the mortgage” as a possible reason why someone may want to refinance, If someone can afford to shorten the term of their mortgage, why would they want to refinance. If they don’t have a mortgage with a early repayment penalty, why not just pay more than the required amount every month? Won’t it work out the same anyway?

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