Last year, we took advantage of a mortgage modification program, and reduced the APR from 5.625% to 5.25%, and changed the fixed period from 10 years to 30 years.
This gave us an estimated savings of about 3.7% from our remaining mortgage payment.
However, if interest rates stay low for another 20 years (Japan, anyone?), we might have made a bad move in retrospect. :)
Now, since housing prices have gone up, and interest rates are still low, it's time to explore options for refinancing.
I gave a quick call to my current lender, and got a rough estimate of 4.8% for a 30 year fixed, and 4.7% for a 20 year fixed.
That would be about a 4.6% savings on the remaining payment for the 30 year, and 5.5% savings for the 20 year.
I guess the next step would be to shop around.
We get mails for rates like 3.5%, but I'm not sure if these lenders are trustworthy or not.
Anyways, hopefully we can close a deal before the FRB starts raising interest rates.
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