
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.