Weebit
Dryer sheet wannabe
Hi there!
I’m a frequent lurker; very rare poster. I really appreciate the thoughtful responses the community gives, so let me say thanks for everything you’ve given me to think about over the past few years.
I currently have two questions on mortgages.
Facts: We have a 15 year mortgage with 14 years remaining on it at fixed rate 3.875%. The mortgage amount is $625,895. We intend to stay in the house for at least another 10 years – probably longer. I’m 57; my husband is 49. I have a “stable” job with the state; my husband is in biotechnology (lucratize, but volatile.) I am hoping to retire in 10-12 years. We have emergency savings. Our P&I is ~$4700; we pay $5000 monthly.
When rates dipped about 8 weeks ago, we contacted our mortgage broker; they didn’t have anything good for us then, but recently got back in touch and said they could get us a 15-year mortgage at 2.875%. The closing costs for this will be $4763.
I’m torn as to whether or not this is a good idea. We’d be saving $300 a month in interest, but we’re paying $4763 for that. That would take 16 months to pay off. Given that we do intend to stay here a while (our house has appreciated considerably since we bought it in 2007, maintained its value during the 2008 crash, and we love the neighborhood and the house) it seems like a good idea to get the lower rate, but it also feels like we “lose” the year that we’ve been paying on this mortgage.
Second, given the COVID situation, it would seem smart to imagine what life might be like if bad luck visits us and we have only one income rather than two. Under that line of thinking, I was actually considering moving BACK into a 30 year mortgage but paying double on it. It seems over time I’ve seen people argue back and forth as to whether having a 30-year mortgage but paying extra works out the same over the long run (well, “long” as in 15 years) as having a 15-year mortgage.
Any thoughts on these two decisions (which are really just one decision, I guess!)?
Thanks much.
I’m a frequent lurker; very rare poster. I really appreciate the thoughtful responses the community gives, so let me say thanks for everything you’ve given me to think about over the past few years.
I currently have two questions on mortgages.
Facts: We have a 15 year mortgage with 14 years remaining on it at fixed rate 3.875%. The mortgage amount is $625,895. We intend to stay in the house for at least another 10 years – probably longer. I’m 57; my husband is 49. I have a “stable” job with the state; my husband is in biotechnology (lucratize, but volatile.) I am hoping to retire in 10-12 years. We have emergency savings. Our P&I is ~$4700; we pay $5000 monthly.
When rates dipped about 8 weeks ago, we contacted our mortgage broker; they didn’t have anything good for us then, but recently got back in touch and said they could get us a 15-year mortgage at 2.875%. The closing costs for this will be $4763.
I’m torn as to whether or not this is a good idea. We’d be saving $300 a month in interest, but we’re paying $4763 for that. That would take 16 months to pay off. Given that we do intend to stay here a while (our house has appreciated considerably since we bought it in 2007, maintained its value during the 2008 crash, and we love the neighborhood and the house) it seems like a good idea to get the lower rate, but it also feels like we “lose” the year that we’ve been paying on this mortgage.
Second, given the COVID situation, it would seem smart to imagine what life might be like if bad luck visits us and we have only one income rather than two. Under that line of thinking, I was actually considering moving BACK into a 30 year mortgage but paying double on it. It seems over time I’ve seen people argue back and forth as to whether having a 30-year mortgage but paying extra works out the same over the long run (well, “long” as in 15 years) as having a 15-year mortgage.
Any thoughts on these two decisions (which are really just one decision, I guess!)?
Thanks much.