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Real Estate Home Mortgages/mortgage possible refinance

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Question
My husband and I built a home in 2008 and borrowed $1000,000.00.  Our original mortgage was for 30 years at 6% interest with payment of $646.30 a month.  We always paid $700.  Two years later we refinanced for a lower interest rate.  This time our beginning balance was $88,968.66 and we dropped to a 15 year mortgage at 3.75% interest.  Our payment is now $647/month.  We still continued to pay $700/month up until March of 2012, when we were able to start paying $1000/month.  And last year we paid an extra $4000 with some our tax return.  Our current balance is $65,131.86.  We have asked at our bank about refinancing again and the loan officer we talked to says we would be better to just keep doing what we are doing; that we wouldn't save any by refinancing.  What are your thoughts on this?  We want to pay off our mortgage as quickly as possible and $1000/month is the most we can pay.  Are there any other things we can do to pay off our mortgage faster?

Thanks!
Robin

Answer
I agree with your loan officer.  There is not enough benefit in the interest rate reduction to justify the closing costs in your case in my opinion.  It would be different if your loan balance was higher.  There are both fixed and variable costs associated with closing a mortgage.  The fixed costs such as appraisal fees makes the value of refinancing a lower balance mortgage smaller than on a larger balance mortgage, so you have to see a bigger rate reduction to have a good benefit from the refinance.  In addition to that your benefit is also reduced when you already have a shorter repayment period.  Interest requires time to accrue.  Your added principal payments is reducing the amount of time you would have to recapture your closing costs expenses.  
About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here

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Mark Schow

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Can: reverse mortgage, mortgages of all types, debt management and settlement, foreclosure problems, real estate investment strategies. Can't: real estate law, standard banking outside mortgage and debt.

Experience

2002-2004 President of the Utah Association of Mortgage Brokers (UAMB) 2004-2008 Board member UAMB, Fraud task force chair, PR chair, Legislative chair. 2002-2005 Delegate to National Association of Mortgage Brokers, Legislative committee. 1996-2008 COO Debt Free Living- Now Debt Fast Track. Founder of company- consumer debt elimination company. 1994-2008 President Secured Financial Freedom. Mortgage broker, serviced nationwide, 120 employees and handled real estate investment loans for the Carlton Sheets group and some Rich Dad clients. 2005-2011 ARES, LLC. Owner, Manager. Private money investments, business consulting. 2011- present, Reverse My Mortgage, LLC. Managing Member. Reverse mortgage education, marketing and sales. 2011- present. Salt TV Network. Financial contributor, Sales Manager.

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UAMB, NAMB

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Ezines.com, Authorstream.com, articlesbase.com, articlealley.com, yahoo answers, wiki answers, UAMB newsletters.

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High School- Alta High graduated 1984 Brigham young University- 1986-1991 Business Finance Major

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Salttvnetwork.com, Doreen Stein, PEI institute, Franklin Covey Coaching, Capital Financial Group, the rest are consumers- cannot give out names due to privacy but have had thousands of clients both for debt elimination and mortgage work.

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