Time to refinance?
Watch out for refinance deals. Yes – you could save a whole bunch of money per month if you refinance to 30 years – but you’ll end up paying more in the long run.
It is much better to pay a larger monthly payment (as much as you can afford) over a shorter period than paying a lower monthly payment over a longer term. It all boils down to that ugly word – Interest. This is not your friend when it’s asking for money from you. The longer interest is interested in you – the more you will pay to feed it.
We received a ‘special invitation’ today from our current mortgage company offering a 30 year refinance, (which they stated would save us about $450 per month). I must admit the lower monthyl payment would be very nice, but in the long run we’d end up paying an extra $218k for the term.
So my advise is – get it paid off as quickly as you can, starting with your biggest payment 1st.
I’m no finance guru – but I can tell you it feels great to know I won’t be giving my mortgage company another $218k over the next 30 years.
So watch out when you refinance, it will never be in your best interest.
