Hellobee Boards

@winter_wonder: wow do you have to pay any discount points to get that rate? that is an amazing rate. I’m looking and I can get 2.75 for conventional 15 year fixed in CA.

Wow, that’s a great rate. I would do it. We’ve hesitated to refinance (our current rate is 3.6) because we aren’t sure we’ll be here long term. Would it be worth it for us to refinance to a 15 year term if we only end up staying here a few more years?

@LemonJack: I would say most likely not because the interest is front loaded.

@winter_wonder: It depends—what are the closing costs on the refi relative to what you would be saving? And how does this impact your monthly payment? If it goes up, do you think you could get a better return on your money in another investment vehicle? If you trust the markets to rebound the long term returns on stocks have historically been ~6-10%, which means your money could do more for your family in the market. But if you’re risk averse or don’t want to deal with the hassle of stocks I hear that too.

TL;DR we looked at refis recently, too, and decided we could get better returns elsewhere.

@winter_wonder: well, does it have to be an either/or (a 15 year vs retirement savings?). We have a 5 year ARM that we refinanced from our first 5 year ARM, because the rates were so low (at the time-around 2.8%). We always go for the lowest interest rate because we are aggressively paying off our mortgage and the monthly savings was big. But we do also still fully fund our retirements, have some additional investments, etc. but we do have to sacrifice, in terms of our spending habits, compared to most of our friends/peers. We’ve live pretty frugally in general to accomplish our goals.

So it may depend on the overall picture?

Our original mortgage, with a 30 year mortgage and the rates at that time—the overall interest after 30 years would have been over 350,000. That’s just the interest.

With our current mortgage (and including what we paid during the previous 5 year ARM), if we have it paid off before the 10 year mark, we’ll pay 84,000 in interest. So that’s a huge, huge difference.

Our retirement accounts have been through the 2008 crisis and what’s happening now (some of our accounts are hanging tough, other have lost so much money we can’t even look at them). so nothing is ever a sure thing, and *maybe* we’d make more putting all the money we’ve put into our house into investments instead—but not paying an additional 270,000 in interest is a sure thing and it’s pretty great? So we’re happy with the choices we’ve made so far.