"And there are no penalties for paying it off early, right?
I had an appointment this morning with a man at Palmetto Citizens to talk about refinancing the house, seeing as how interest rates are about half what we’ve been paying. (There’s no time like the present, folks — see the ad at right.)
So my wife walked me through all the documents she had gathered in preparation, and I nodded, and eventually said, slightly hyperbolically, “You realize I don’t understand any of this,” and she said she knew — but she had to be at my son’s house this morning taking care of our grandson.
In the end, she decided to bring him to the meeting. I could have handled it, you understand. I understood the broad concepts, and knew that we were shooting for a number that would enable us to wrap together the basic mortgage and our home equity loan into one payment that was sufficiently lower than our total now that we can still pay it off, via overpayments, in five more years — which is when we’d be done with our current 15-year mortgage. I had, after all, suggested we do this. Actually, I meant that I wanted her to do it, but you know what I mean.
I had the bundles of documents, and the numbers written out in front of me, and was all set. Except that she and I both felt better with her there, and doing the talking, while I rocked my grandson’s carryall back and forth, and jiggled my keys in front of him.
But I tried to act like I was following the proceedings, with a fixed look of concentration on my face — just like our little guy in this picture taken during the meeting. We were a team, and together we got through it, and it’s looking good…
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Be careful with this. If you have an interest rate of around 6% now with only 5 years left you’re probably not paying much interest. You have to weigh the interest rate savings vs the closing costs. (Of course tax considerations should be taken into account. Your high interest rate is tax deductable. Unless you have a lot to deduct you may not save as much after taxes if your new loan has a very low interest rate). I guess the wildcard here is the home equity loan. Sometimes those can have very high interest rates. Just be careful. Banks make things sound wonderful but they’re looking to make a buck on the closing costs. Once you figure in all the closing costs and tax consideration you may not come out ahead with such a short payoff horizon. (This would probably be a no-brainer if you still owed 10 or more years).
Agree with bud.
What a precious little boy. Great photo.
What a cutie your grandson is!
A refinance with 5 years remaining? I doubt you even pay enough interest now for it to even be worth deducting on your tax returns.
I love how people talk about “write offs”, what they don’t realize is that for every dollar in deductions, you actually only get about 20 cents back. If you file a deduction for $3000, you might get back $600 of that amount.
I’d stick with what you’re doing now.
That is a very cute baby.