Reality of extending your loan

By June 20, 2019No Comments
a lady typing on a computer.

I want to talk to you about some more information about Refinancing

There’s something that lenders do not tell you

It’s a nasty little secret, it’s completely manipulative

And it can completely screw you, if you are 4 years in on your 30 year mortgage

And you refinance to a new 30 year mortgage


Look, here is what people do, consumers do it, my peers do it

I don’t understand why, what they look at is …


Hey your closing cost are going to be $5K

I am just making up a number as an example

We are going to save you $250/month

If you divide $5000 by $250 in 20 months


Your savings equals your cost, so they tell you that it’s going to take

20 months to break even… Uhhhh, Big Fat Lie!!


So here is the reality, what we also need to add in to the cost

is the extra 4 years of mortgage payments

Now, if you are out of that house in 5 or 10 years it doesn’t matter

But I speak to more people nowadays

and they are buying a house and they are telling me

“Scott, this is my long term house..”


I had this older gentleman once I was doing a loan for  

I said “Sir, how long do you plan on being on the house.”

He looked at me very seriously and said “They will carry my stiff corpse out the front door.”

I was, “ok that’s a little negative but yes, sure we will go with long term”


Look, if you are in your house long term

if you are thinking of they need to carry your “stiff corpse” out the front door

Then please we have got to understand

that extending the life of your loan is very expensive.


If your mortgage payments is at $1000/month or $2000/month,

and we are running 4 years, that’s $96,000 worth of payments

In addition to the $5000 closing cost, your cost for that loan is now

over $100K, probably not going to make sense


Here is the trick, instead of doing a new 30 year, do a 25

do a 20, or do a 15..double down on your benefits by saving money monthly

And reducing or maintaining the current term of your mortgage


That’s what I got for you, I’m Scott DiGregorio

Your Mortgage Guy, reach out to me

let me run some numbers for you, I’m here to help

Take Care.


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