Is refinance better than prepayment?
I'm trying to decide whether to refinance my mortgage or prepay it instead. It seems to me like both would have the same result of lowering the total amount of money you end up paying, except that there are no closing costs for a prepayment. because I know a lot of people refinance but it seems like nobody prepays, so I'm just wondering if there are other things about refinancing that make it better than prepaying? by KyleChezum from Orange, California. Aug 9th 2010
Gregorio Denny (GVDenny)
#257 ranked lender in California - 380 contributions
You will have to run the numbers yourself or have an experienced loan officer run them for you to figure out if refinancing would actually save more than just accelerated payments. With rates as low as they are and depending on their current rate, I have been advising people to do both. If you can do a no cost refinance, not increase your term and drop your rate, accelerated payments have an increased and exponential effect on paying off your mortgage. I am in California and licensed in California, give me a call to discuss your options. Gregorio Denny --WeFixRates.Com--
Rudi Hofmann (CaPortfolioLoans)
#281 ranked lender in California - 380 contributions
The first item to consider is how many years you have been in this loan. Next is comparing your interest rate with current rates. Then what is the cost to refinance. How many months or years is your break-even point. ... Most mortgage websites like mine have financial calculators that can help you figure this out. .... Happy funding, Rudi
Richard Woodward (RichardWoodward)
#37 ranked lender in Texas - 106 contributions
Depending on your current rate you should do both. I can offer you a no cost refinance and if you combine your planned prepayment with the new lower interest rate and payment - you double your winnings! Call me for help running those numbers. 972-661-5136 mortgageprosus.com
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