Re-fi....worth it?

[purplepenguin7]

I am currently in the process of refinancing from 5.25% to 3.875%. I have had the mortgage for about 4 years, and will be going back to a 30 yr fixed. Is there a way to determine how much I am "saving"? I know I will be saving monthly (over $300), I am just wondering long term, if i lost 4 years worth of interest. I am paying very little out of pocket for the re-fi if it matters (around $1k). I don't plan on being in this home long term, in fact i'd like to sell as soon as the value goes up enough for me to not have to bring money to the table (this will probably be a while though). Any advice on whether or not its worth it?

[mrs.spunky]

www.bankrate.com/calculators/mortgages/refinance-calculator.aspx

[M]

I use to do a lot of refi's and a big jump down in interest like that usually does "save" somewhere. But the biggest payoff in refinancing is if you keep making the same payments as before. You'll get it paid off faster than that 26 years you currently have left because of the lower interest rate...among other factors.

[Deleted]

You aren't really losing 4 years of interest. The interest is just paid on the balance and so the balance you're refinancing is lower than it was when you first purchased the house. The amount going to interest each year goes down simply because the amount of interest accruing becomes less each year as the balance goes down.

Unless you have a mortgage that has you prepay interest or something. I don't know if those exist.

If your payment goes down $300 a month and it only costs 1k to refinance, I see no downside. You'll come out ahead in less than 4 months

[marathon55]

I can tell you that we just closed on our refinance last week and actually made "$750 of prinicple reduction with no out of pocket costs to us" We went from a 4.125 to a 3.75. It only saved us about 90 a month but it actually made us to do it.

[MadamePresident]

With refinancing you are also restarting the amortization tables on your loan. Generally your first payments are more interest then principle, which changes the longer you have paid on the loan. Its worth doing playing with the numbers, to see how comfortable you are with that.