Question by Jignesh S: Help with Financial Calculation?
Hi,
I am in need of a “calculator” or set of calculator that helps me make a decision on my personal situation. Here is brief:
I am planning to refinance my house. Trying to decide 15 year mortgage vs 30 years. I have already completed about 4 years of mortgage.
Now here is dilemma:
If I do it for 15 years I save about 160K in additional interest payment. So that is a good news. However, it sets me up with 800$ per month extra in payment. Now, IF I go for 30 years ( which frees up 800$s ) — and if I consistently invest in stock/funds etc and assuming ( 6% on average return, 8% is too aggressive!! , OR I want to see various returns % ) and at the same time I save in taxes for additional 15 years. Which is better 160K I saved OR 30 year option.
Also, consider that after 15 years I would have freed up the whole mortgage payment so I could very well invest those money for additional 15 years. But then tax benefit for last 15 year would go away. Also, I might need to factor in inflation as well.
Any calculators on the market OR any direct help from the community would help me determine this ? I am just trying to do various What-IF scenarios to make up a decision.
Thanks
– Jignesh.
Best answer:
Answer by Robert M
go with the 30 and pay extra principal each month as you are able.