Financing in 35901>Question Details

Linda Brandon, Home Seller in Gadsden, AL

I owe $50,000 and have 5 years left on a 4.125% loan. Would I be better off to refinance or continue to pay $200 extra in principal each month?

Asked by Linda Brandon, Gadsden, AL Thu Jul 12, 2012

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You shouldn't refi since it cost money to refi. You are better off putting the extra money in each month.
0 votes Thank Flag Link Fri Jul 13, 2012
Great question. Pay the extra $200 a month. Refinancing when you owe so little and already have an excellent rate won't make sense; any saving will be offset by the refinance fees.
0 votes Thank Flag Link Fri Jul 13, 2012
Pay extra to principal.
In order to refinance a $50K loan amount it will cost you a bundle to even get market rates since the additional fees cannot be absorbed as easily and are not necessarily less for smaller loan amounts.

This is a fairly easy decision to not refinance.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Thu Jul 12, 2012
You have a relatively low interest rate, a smaller loan amount, and only 5 years left on it. Given all of those, you would probably not re-coup your closing for it to be beneficial.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing
0 votes Thank Flag Link Thu Jul 12, 2012
It would totally depend upon what your long-term goals are:
You probably are not enjoying much of a tax deduction; and this could be important.
Is having a paid-off house important to you?
Are you planning on staying there forever?
Do you need some cash?

like I said; many considerations:
you should sit down with a tax advisor/financial specialists;
many people would like to be in your position.
0 votes Thank Flag Link Thu Jul 12, 2012
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