OT financial question

[marty]

i got a mailer today that said it would lower my rate ~1% from 5.8 to 4.6, i would go from no points to 2 points ( not a clue what points are but i don't think it goes toward a championship ) and i go from my current 30 year fixed which i am about 5 years into, to a 15 year fixed. my loan would go up ~$300 a month but would save $94,000 in interest over the life of the loan. $94k is over 40 years worth of honda pistons, so it got me thinking. i don't really like being married to a more expensive loan in the event the bar slows down, but at least right now i could probably do the extra amount. i can squeeze a penny so tight i can make abe lincoln fart, but i am not very experienced with long term planning.

so my questions to the financial folks, are there any calculators out there that can help me see if it would be better to stay in the 30 year and pay extra, or go to the 15 year and have to lock into a higher payment? also, would the extra cash be better paid toward the 30year or my HELOC or my truck and street bike payment?

[glenngsxr]

Marty,
Points are basically a fee charged at closing in exchange for a lower interest rate. If you are getting two points, you are paying a 2% of the loan amount fee up front. Banks that have some cash flow issues usually issue points. Probably why you got the flier, but this is not always the case. My two cents....It will save you a ton in interest over the life of the loan, but you are legally bound by the new payment. Meaning...if something happens at the bar, you are stuck with the higher payment. You have a 5.8% rate now, which is still historically low. I would stay where I am and send in $150 extra bucks to your mortgage. On the average $250K loan, sending in $100 extra every month will cut 8-10 years off your loan anyways. Pay off high interest debt first. Glenn #62

[137]

marty, call dale and shoot the shit with him. i just did a va streamline through him and he was great to work with. i'm inclined to agree with glen though and refi for a 30 year note and just pay extra toward the principal when you can. dale has thread going in another section on this board

oh and by the way, i'm finding out these honda pistons aint cheap so count me in on that 40 years worth :lol:

s.

[T Baggins]

I did 4.875 with no points and no discount thru Dale Eaton. Saved $750/month over my previous loan!

Call me if you get a chance, I can splain you more...

303-333-4411 wk

[phildrummond]

Call Dale and spend some time on Bankrate.com. There are all kinds of calculators to show which to chose...15-year v. 30-year or if it's worth the refi based on the fees and points you'll pay in closing cost. bankrate also has a calculator to show you how best to pay off the debt...HELOC, bike payment. I'd guess it'll tell you to throw that $300 at the bike/truck, then HELOC, then extra house payemnts, depending on the rates.

http://www.bankrate.com/calculators/home-equity/refinance-calculator.aspx

5.8 is a good rate, but it seems to me you can get around 5% on a 30-year now with no points with good credit and either a down payment or some equity. My friend just got a lower rate on a 20-year v. a 15-year so check those out.

My 2 cents: I pay my regular payment each month, then add 1/12th of the payment to a money-market account. If I don't get laid off, I send it at the end of the year and have made 1 extra house payment. If I do get laid off, that cash is there to feed me (or buy Honda pistons).