Want to pay off your mortgage sooner? If you haven’t refinanced your mortgage in the last couple of years, now may be a great time to take advantage of historically low rates and pay your mortgage off sooner.
Earlier this year I worked with Pam and Mark on a refinance, with the goals of saving money each month and paying their mortgage off as quickly as possible.
Pam and Mark had owned their home for about a year. At the time of purchase, they put only a small amount down, as they were in the process of selling their previous home. Once the sale of their previous home was complete, Pam and Mark used $80,000 of the proceeds from that sale to pay down the balance on the mortgage for their new home. So after only year, the mortgage on their new home had gone from the original amount of $227,000 to $140,000.
To determine which new mortgage option was best for Pam and Mark, I started with a mortgage scenario analysis.
We gathered information on their current mortgage: original and current loan balances, interest rate, and term. I then looked at current rates for 15, 20, and 25 year mortgages and determined what their new monthly payments would look like.
Pam and Mark reviewed the options and decided that paying their loan off sooner was a higher priority to them than saving money each month. So, they decided to refinance their loan from a 30 year fixed rate mortgage at 4.125% to a 15 year fixed rate mortgage at 3%. Their total payment decreased by $92 per month, while also enabling them to pay down the principal at a faster rate than before.
Pam and Mark filled out an application and provided all the necessary documentation for their new mortgage. A month later, they were happily and quickly paying off their mortgage faster than before.
Interested in a refinance? Contact me for a complimentary scenario analysis to help you choose the best option for your needs.
All loans subject to credit approval. Rates and fees subject to change. Mortgage financing provided by PrimeLending, a PlainsCapital Company. Equal Housing Lender. © 2016 PrimeLending, a PlainsCapital Company. PrimeLending, a PlainsCapital Company (NMLS: 13649) is a wholly owned subsidiary of a state-chartered bank and is an exempt lender in TX. V010116.