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>>> Do they also have the ability to refinance long term to a lower rate if it becomes available? Typically yes. There are mortgages that penalize you for payi
by analog31 3y ago
>>> Do they also have the ability to refinance long term to a lower rate if it becomes available?
Typically yes. There are mortgages that penalize you for paying them off early, but the conventional wisdom is to avoid those.
For our previous house, my family re-financed twice. In our present house, we got a 15 year mortgage, and paid it off early.
- judge2020 3y ago> Typically yes. There are mortgages that penalize you for paying them off early, but the conventional wisdom is to avoid those. And these clauses were largely made illegal by the 2010 Dodd-Frank Act.
- SoftTalker 3y agoYes. There are fees associated with a refinance so it might not make sense if you don't plan to be in the house for at least a few more years. But I've refinanced twice (two different houses) once to get a lower rate and once to both get a lower rate and shorten the term to 15 years. The real key is to NOT take equity out when you do this. Many people do but that's like starting over with a higher mortgage balance. Just refinance the outstanding balance if it makes sense, and do not reset the term back to 30 years. I'll have a fully paid-off house in a few years that I plan to retire in with only taxes and insurance to worry about.
- analog31 3y agoIndeed, that's what we did -- refinanced the outstanding balance for a shorter term. We now live in a functioning but small and ugly house, paid off.