Hi everyone... I would like to ask for your insight about refinancing our mortgage.
Here's the situation: We are locked in for 10 years at 5.79% amortized over 21 years. We have a balance of $91,000. Purchased price on the condo was $130,000. Our contract allows us to pay down up to 20% per year, which is just over $18,000 this year.
Here's the question: Should we borrow $18,000 at a lower interest rate and apply the loan directly to the principal of the mortgage? Is there another way to do this? The goal is to reduce the overall cost of the mortgage and the amortization period.
Any thoughts?
Thanks
Stephan
Here's the situation: We are locked in for 10 years at 5.79% amortized over 21 years. We have a balance of $91,000. Purchased price on the condo was $130,000. Our contract allows us to pay down up to 20% per year, which is just over $18,000 this year.
Here's the question: Should we borrow $18,000 at a lower interest rate and apply the loan directly to the principal of the mortgage? Is there another way to do this? The goal is to reduce the overall cost of the mortgage and the amortization period.
Any thoughts?
Thanks
Stephan