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esearchi Businessenglish emsearchn Mortgagebankukmortgage window.scrollTo%28%29%20%D3%C3%B7%A8i Mortgage s Szh searchn Mortgage Mortgage osearchl Mortgage gwindow.scrollTo%28%29%20%D3%C3%B7%A8 searchesearchosearchd for the same reasons as considering for a longer term mortgage and because of how financial aid is determined. With that said, I think if you start doing an auto-payment for college, even if it's small, you're going to feel a lot better when your little one is graduating from high school and you CAN help out a bit (if you have saved for retirement).
Please don't misunderstand me, I think shorter term mortgages are great - especially considering how low mortgage rates are. I am merely suggesting that you consider your whole financial enchilada (it's Cinco de Mayo today!) before making YOUR decision. You can always pay down or pay off your mortgage once your retirement and savings are in order.
One way to help boost your savings is to take advantage of today's low mortgage rates. There are many programs available for refinancing primary and vacation homes as well as investment properties. FHA streamlined refinances do not require an appraisal and HARP 2 (for conventional mortgages securitized by Fannie Mae or Freddie Mac prior to June 1, 2009) may not require an appraisal either. You may be able to reduce your rate and shorten or keep close to your same mortgage term.
I am happy to review your mortgage to see if refinancing makes sense for your home located anywhere in Washington. Click here if you would like me to provide you with a mortgage rate quote.
I'm running this scenario for one of my Seattle area clients who is considering buying a home priced at $500,000 with 20% down payment and excellent credit (scores are 740 or higher). She is most interested in a 15 or 20 year fixed mortgage.
The following rate quotes are as of May 2, 2012 at 11:15 am based on a loan amount of $400,000. For your personal rate quote for your home located in Washington, click here. Rates can be lower by paying discount points or closing cost can be reduced by having a higher rate which creates a rebate credit.
15 Year Fixed
2.875% (apr 3.168) with closing cost (excluding prepaids and reserves) estimated at $8500 and a principal and interest (P&I) payment of $2,738.34.
3.125% (apr 3.255) with closing cost estimated at $3990 and P&I of $2,786.44.
20 Year Fixed
3.625% (apr 3.823) with closing cost at estiamted at $7240 and P&I of $2,345.61.
3.875% (apr 3.971) with closing cost estimated at $1300 and P&I of $2,397.66.
My client didn't ask for the following scenarios, however some of my readers may want to compare the above rates and payments to what is currently available with a 30 year fixed rate.
30 Year Fixed
3.750% (apr 3.918) with closing cost estimated at $8400 and P&I of $1,852.46.
4.000% (apr 4.070) with closing cost estimated at $1875 and P&I of $1,909.66.
Just for giggles, lets compare a 10 Year Fixed.
10 Year Fixed
2.875% (apr 3.219) with closing cost estimated at $6970 and P&I of $3,839.39.
NOTE: If I were considering this scenario, I would look closely at the 15 year with the same rate (quoted above). Although it has higher closing cost by $1530, it allows the home owner to have more flexibility with the payment. You can always make the 10 year payment on a 15 year note, but should you find funds tight one month, you're not able to make a 15 year payment on a 10 year note.
If you would like me to provide you with a mortgage rate quote for your home located anywhere in Washington, please click here.