Refinancing mortgage - newbie tips?

[AJ_Katz]

Although I've purchased real estate a few times now, I've never refinanced a loan.  We purchased a new home over a year ago and it looks like rates are lower now then when we purchased.  At this point, I could refinance into a 15-year loan and keep the same payments as my 20-year loans, or refinance into a 10-year loan and increase our mortgage payment by about 50% (excluding escrow).  But I've never refinanced before and, besides the paperwork headache and paying some closing costs, I wondering if there is any reason I shouldn't go down this path?

Also, has anyone refinanced a rental home before?  I have a property rented out that could benefit greatly from a refinance, but I suspect the paperwork is even more hairy for a rental versus a primary residence.  I've been avoiding this thinking it's going to be too difficult, but would appreciate feedback from others who have done this before.

[ciao_yall]

Although I've purchased real estate a few times now, I've never refinanced a loan.  We purchased a new home over a year ago and it looks like rates are lower now then when we purchased.  At this point, I could refinance into a 15-year loan and keep the same payments as my 20-year loans, or refinance into a 10-year loan and increase our mortgage payment by about 50% (excluding escrow).  But I've never refinanced before and, besides the paperwork headache and paying some closing costs, I wondering if there is any reason I shouldn't go down this path?

Also, has anyone refinanced a rental home before?  I have a property rented out that could benefit greatly from a refinance, but I suspect the paperwork is even more hairy for a rental versus a primary residence.  I've been avoiding this thinking it's going to be too difficult, but would appreciate feedback from others who have done this before.

You could also do the math and figure out if paying off your mortgage faster would offset the closing costs of the refi.

[clean]

I dont know of any downsides to paying off the debt earlier. You will pay some closing costs (and should get an estimate of what they are, so that you can make an informed decision either way).  From the way that you have set up the question, you are not saving money each month, but paying off the payment 60 months earlier!  IF you are able to pay off your house 60 months earlier, and then put that into a 403b/401k, how much will that add to your retirement when the time comes?  When I paid off my house, I put that payment into my retirement and am now making plans to be able to retire at 60!

For the rental, you wont know how much of a problem it will be until you investigate!  However, you are paying interest to the bank in exchange for them lending you money. If the price of that service has dropped, why keep paying full price for the same service?  You have nothing to lose by asking!!

[Ruralguy]

You need to know how much you would save over the life of the loan by doing the refi (be sure to include the closing costs). It can be 10s of thousands, typically, or more I very high priced area and big interest rate differences. Any reputable loan officer will do this for you, by you should also check. You can probably die quick and dirty estimates with pen and paper, but you probably find charts and calculators on line.

As Clean says, there are also new opportunity benefits such as investing that extra money. Of course, this assumes you can handle the higher payments and up front closing costs.