Take a look at what happens when you refinance to a shorter loan term. If you have a rate of 5.00% or higher, you might want to consider shortening your loan term. What will this do? You will build equity faster, you will pay less interest and you will pay off your mortgage quicker. All good things to think about.

If you have a $250,000 fixed rate loan at 5%, your payments will be approximately $1,340 a month. Refinancing into a 15 year loan at today's rates will increase your payment by about $540 a month. That's a lot of money and most people can't do it - but if you can. The difference in interest paid over the life of the loan is a staggering $145,000. And think about this... After you have paid for seven years on a 30 year loan, you still have 23 years left to pay. On a 15 year loan after seven years you only have eight years left. That is sweet...

Of course, paying an additional $540 is not an option for most of us, so why not consider a 20 year fixed rate loan. At 4.25% (today's rate), your payment would increase by about $200 a month. You would be saving over $100,000 in interest payments over the life of the loan. And if over time you threw a couple of extra payments (like when you get your income tax return) at your principal you can take years off your term. If you are in Utah and have any questions, please give me a call - 801.550.1222.