Want to save money each month? 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 to create monthly savings.

Rich and Lynne came to me with a goal of saving money each month.  Rich and Lynne had purchased their home in 2010 for $700,000, putting 20% down in 2010. At that time mortgage options for jumbo loans were limited, so ended up a combination of a first and second lien instead of a single loan. They paid a bit extra on both loans each month to pay off the loans a bit faster, and their current combined loan balance was around $495,000. While the rate on the first lien was quite good at 3.5%, they believed there was a better option for the second lien which was at 6%.

To determine which new mortgage option was best for Rich and Lynne, 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 20, 25 and 30 year mortgages and determined what their new monthly payments would look like.

refi-to-save-chart

Rich and Lynne were pleasantly surprised by the monthly savings they could generate by refinancing. Given that they had owned their home for 5 years already, they chose to move forward with a 25 year refinance and used their new found savings to pay for a beach vacation.

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.