Oklahoma lenders seeing another refinancing rush, 15-year mortgages

People who refinanced as recently as just a couple of years ago are doing it again.
by Richard Mize Published: September 29, 2012
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Well, Scott Senner, a mortgage banker with First Commercial Bank in Edmond, has done the math. He provided two examples:

•  A borrower has a 30-year loan at a rate of 5.25 percent with a balance of $100,000 on an original loan of $125,000.

The current payment (principal and interest) is $561 per month.

A new 30-year payment at 3.5 percent comes to $449.

A new 15-year payment at 2.875 percent comes to $684.

•  A borrower has a 30-year loan at a rate of 5.25 percent with a balance of $250,000 on an original loan of $275,000.

The current payment (P&I) is $1,518 per month.

A new 30-year payment at 3.5 percent comes to $1,122.

A new 15-year payment at 2.875 percent comes to $1,711.

Senner said all the concentration on lowering monthly payments has clouded the benefits of refinancing to shorten the term of a loan to 15 years.

“A comment I am hearing a lot right now is, ‘So, a 15-year loan will only raise my payment by X amount, and I can pay my loan off that much faster?' Since my customers are almost always surprised that the 15-year payment is not that much higher than what they are currently paying, I suspect that a lot of your readers would be as well,” he wrote in an email.

Readers, now you know.

by Richard Mize
Real Estate Editor
Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked...
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