Should I Refinance My Mortgage or Just Pay Extra?


If your goal is pay down your home loan as quickly as possible but you are considering mortgage refinancing to take advantage of historically low-interest rates, you might wonder if this is a good idea. Here’s an answer from Dr. Don at

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I have a 30-year, $266,000 mortgage at 4.875 percent with 335 payments left. From the first payment, I paid an additional $330 per month, aiming to pay off the loan in 20 years. Now, the same local bank is offering a 15-year mortgage at 3.875 percent. Should I refinance to a 15-year loan to cut down further on interest expenses?

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Mortgage refinancing is a good idea if you’re satisfied with the amount of time it takes to recoup your expenses from getting the new home loan. Every mortgage has an origination fee and closing costs that you’ll be paying one way or another if you refinance.

Before you gain any benefit from today’s best refinance rates you’ll have to recoup your loan origination fee and closing costs. The more you pay at closing, the longer it’s going to take you to break even before realizing any benefit.

You can learn more about answering the question should I refinance my mortgage by checking out my free underground mortgage videos.

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{ 1 comment… read it below or add one }

John Wingate August 12, 2012 at 10:43 am

I love this article! Many of my clients ask me this but being that I’m not a professional in this field I send them to a local friend. When they refinance there are some fees that must be paid but over the long run there can be a lot of money saved. It really depends on the persons needs to see what they need to do.


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