Refi advice please… - Posted by Sheik

Posted by Sheik on October 22, 1998 at 15:31:47:

Hi all:

I think I know what’s the right thing to do but

I am looking for some reasurance.

I have the opportunity to refi my home and I am

wondering whether I should go ahead or not. Here’s

the scenario:

Market value - $130K; Want to keep my monthly approx $600.

CURRENT MORTGAGE:

N(remaining)= 247 I=8.625 PV(remaining) = 70K PMT=606.68

I am offered either a new 15yr @ 6.875 or a new 30yr @ 7.25.

MY ANALYSIS:

(15yr ANALYSIS)

N=180 I=6.875 PV(including closing cost)=74K PMT=659.97

In my opinion, its not worth doing the a refi for 15yr.

If I wanted a shorter term, I can simply add the difference

in payment to my current mortgage resulting in -

N(calculated)=200 I=8.625 PV=70K PMT=606.68+53.29=659.97

Refinancing would save me about 20 months of payment

(approx $12K)

(30 YR ANALYSIS)

Refi for 30yr without pulling out more cash.

N=360 I=7.25 PV(w/closing costs)=74K PMT(Calculated)=504.81

This results in a saving of about $100/mo (which I WILL

direct to my RE investing)

Going further: Refi for 30yr AND pull 10K cash for more

RE investing.

N=360 i=7.25 PV(w/closing costs)=84K PMT(calculated)=573.03

This last scenario results in $10K cold cash AND a monthly

savings of about $33 from my current payment.

So tell me what you think.

Shoud I do 1) 15yrs or 2) 30yrs w/ no cash or

3) 30yrs w/ cash or 4) nothing!

Thank you for going through this cumbersome analysis.

Your inputs are all welcome.

-Sheik