A native Californian transplanted in southern Illinois.So I continue to mull over the Harp 2 refinance thing. I have learned that the loans are at market rates and the fees are typical. So I could snap up a 4% 30 year fixed or 3.3875% for a 20 year fixed.
I have to say, that 20 year loan is tempting. The rate is unbelievable, and even with no prepayments, I would be done with my mortgage shortly after my 65th birthday. The payments would be slightly less than now (about $10 - $15 per month), and I could stop looking for ways to chip at my mortgage and instead look for ways to save a bit more.
On the other hand, going with the 30 would free up $177 per month due to the lower payment. I could use those dollars towards retirement savings and really give my nest egg a boost. Once my IRA is maxed for the year, there would be nothing preventing me from paying down the mortgage some. Having a lower minimum payment would also come in handy in the event I become unemployed at some point.
I make up my mind one way, then change it again.
Thinking Out Loud
January 13th, 2012 at 07:39 pm
January 13th, 2012 at 07:49 pm 1326484177
January 14th, 2012 at 12:53 am 1326502403
January 14th, 2012 at 03:02 am 1326510140
I'd also go with the 20-year mortgage becus it'll "force" you to make those higher payments, no matter what. But the reward will be worth it.