OK so I crunched some numbers......I estimated the mortgage at $131,000.00 even though we are at $131,850.00 right now, I figured that would be easiest to estimate.

Scenario #1

-Paying off the current mortgage without any additional payments.

-Monthly payment $940

-19 years left on 20 year mortgage at 4.8%

-Payoff date 08/2029

-$68,936.29 paid in interest from now till payoff

Scenario #2

-Paying off the current mortgage and paying $200 extra per month

-Monthly payment $940 + $200

-19 years on 20 year mortgage would be paid off in 15

-Payoff date 07/2024

-$48,840.12 paid in interest from now till payoff

Scenario #3

-Refinance to 15 year mortgage at 3.75%, no extra payments

-Monthly payment of $952 (only increases $12!)

-15 years

-Payoff date 09/2025

-$40,479.18 paid in interest from now till payoff

Scenario #4

-Refinance to 15 yr and pay $200 extra per month

-Monthly payment of $952 + $200

-15 years would be paid off in 12 years

-Payoff date 04/2022

-$31,085.88 paid in interest from now till payoff

So the winner is Scenario #4!! The payment will only go up $12 and we would save $28K in interest if we compare the regular payment scenarios and $17K if we compare the extra payment scenarios plus the benefit of automatically taking 4 years off. I am going to apply to our bank online tomorrow and also fish around and see if I can find a similar rate for less closing costs too. I am not interested in going out of the local area so hopefully I can find something good. But I do really like the bank we are using, they always apply my principle payments correctly, have good internet bank, great customer service, and the BEST free cookies in their lobby! But even if the costs were about $5K we are still saving so much it would be a wash on the closing costs.

# Running the numbers for the refinance

July 15th, 2010 at 02:30 am

July 15th, 2010 at 03:23 am 1279164233

July 15th, 2010 at 10:31 am 1279189899

July 15th, 2010 at 12:24 pm 1279196676

July 15th, 2010 at 04:59 pm 1279213164

$5k borrowed at 3.75% (for costs) = $15/month, in addition. Won't change #3 or #4 substantially.

July 15th, 2010 at 06:20 pm 1279218029

July 15th, 2010 at 09:05 pm 1279227927

Obviously if you don't trust yourself to dedicate that $200 EVERY MONTH to the side account it doesn't work, but it gives you some flexibility/ cash on hand and still achieve the result you desire should you so choose.

Just something to think about.

July 15th, 2010 at 11:15 pm 1279235744

Scenario #3

-$135,000.00 (Balance plus estimated closing costs)

-Refinance to 15 year mortgage at 3.75%, no extra payments

-Monthly payment of $952 (only increases $12!)

-15 years

-Payoff date 08/2025

-$40,479.18 paid in interest from now till payoff

Scenario #4

-$135,000.00 (Balance plus estimated closing costs)

-Refinance to 15 yr and pay $200 extra per month

-Monthly payment of $952 + $200

-15 years would be paid off in 12 years

-Payoff date 05/2022

-$32,256.56 paid in interest from now till payoff

July 15th, 2010 at 11:17 pm 1279235865