• Search for your dream home

    Our tools can help you find the house you've been looking for and our team will help with lending options.

    Find a Home
  • A fresh approach to residential mortgage lending.

    We utilize only the most recent technology and best possible practices to ensure your time working with us is as efficient as possible.

    Get Started
  • Getting your mortgage loan just got easier

    We do all the work so you don't have to.

    Contact Us
  • Your perfect home is only a few clicks away

    Secure the home loan you need now. Use our convenient online loan application.

    Apply Now

Retirement planning & paying off your home.

Posted on August 19, 2008 by Ray Williams.

Have you ever wondered how you could pay off your home sooner, save thousands and thousands of dollars in interest, prepare for retirement?

Here is a very simple way to save big, a loan refinance that many of our clients have found a great solution…

Streamlining into a shorter term loan…

Here is one example;

30 YR Fixed –streamline to new- 15 YR Fixed –lower rate, payment, reduce years, interest & MI

You purchased your home in June 2000 with an FHA 30 YR fixed rate loan at 7.00%. At that time it would have looked something like this;

 

Purchase price                                                                        $200,000.00

Less 3% down payment                                                               $6,000.00

Add UPMIP (2.25%)                                                                   $4,365.00

Principle balance of loan                                                         $198,365.00

Payment

Principle & Interest                                                                     $1,319.73

Monthly MI                                                                                 $     80.83

Total before escrows (taxes & insurance)                                   $1,400.56

 

After 8 years of making scheduled payments…96 payments of $1,400.56… you have paid $105,849 of interest, $7,394 of monthly MI (Mortgage Ins.), and $20,845 of principle.  You have a principle balance of $177,520 remaining, along with 264 more payments totaling $353,067.

 

Why would it make sense to refinance after 8 years?

 

It will save you $80,729 in interest to streamline your current FHA 30 year loan into a new FHA 15 year loan.  You can reduce the term of your mortgage by 7 years, lower your interest rate, eliminate the monthly MI and keep your payment about the same. Until Oct.1, 2008 the UPMIP (Up Front Mortgage Insurance Premium) on a new streamline is only 1.00%.  If you have made additional principle reductions over the years, your savings will be even greater.

Other streamline options;

Available options (all require interest rate reduction);

30 YR Fixed –streamline to new- 30 YR Fixed –lower rate and payment.

30 YR Fixed –streamline to new- 15 YR Fixed –lower rate, payment, reduce years, interest & MI

15 YR Fixed –streamline to new- 30 YR Fixed –lower payment, extend term.

15 YR Fixed –streamline to new- 15 YR Fixed –lower rate and payment.

1 YR ARM –streamline to new- 30 YR Fixed –lock in fixed rate, potentially lower payment.

3 YR ARM –streamline to new- 30 YR Fixed –lock in fixed rate, potentially lower payment.

5 YR ARM –streamline to new- 30 YR Fixed –lock in fixed rate, potentially lower payment.

Call for other options…

 

Give us a call or e-mail if you want to see specifics for your scenario!

Leave a Reply

Your email address will not be published. Required fields are marked *