A common argument against refinancing a mortgage is that it seems like a backward movement, as the clock is “restarted” with a new 30, 20, or 15 year loan. But there’s a way to move forward by refinancing into a new loan without restarting the term. We call this our Flex Term Refinancing program. This can help manage both budget and timeline, potentially producing savings of hundreds each month and thousands over the life of the loan.
It works like this: a 30 year fixed rate loan was $407,500 a few years ago at 4.75% interest; the monthly principal and interest payment being $2,125.71/month. After 25 payments, the owed amount is $395,055.05 with 335 months remaining. With a Flex-Term Refinance at today’s rates, a new 3.75% loan can be acquired and structured so that the existing term stays the same at 335 months. Assuming the same balance of $395,055 is financed, the new monthly payment becomes $1,899.19/month. Not only do you reap a savings of $226 per month, but your initial loan term remains unchanged.
