I’m 66 and I have $47,000 left on my 30-year mortgage. I’ll be 90 when it’s paid off. Should I refinance to a 15-year fixed?

I am 66 and have a mortgage with $47,000 remaining. My interest rate is 3% and it is a 30 year fixed rate mortgage. I pay $136 per month.

My mortgage was supposed to be paid off in 2027. But my old lender decided to sell my loan to another, and now it looks like my mortgage won’t be paid off until I turn 90.

I want to refinance my loan into a 10 or 15 year fixed rate mortgage, to pay off the loan sooner.

So my question is, is it a good idea to refinance? Please advise.


No chance

The big move‘ is a CNET column examining the ins and outs of real estate, from navigating the hunt for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at [email protected].

Dear no luck,

Looking at current mortgage rates, I’d say it’s best not to refinance your 30-year fixed mortgage.

I know you want to pay it back quickly. But you have a mortgage with an interest rate of 3%. You’ve snagged an all-time low interest rate, which we may not see again for years.

If you want to refinance, your monthly payments could increase. The mortgage rate for an average 15-year mortgage is over 5%. I don’t know if you want to because you may be retired now or planning to retire very soon.

If you’re considering doing a cash-out refinance, David Krebs, who is a Florida-based mortgage broker, said it might be a good idea, as long as you have enough equity in your home and the value of the property is high. enough.

If you have a “pressing need for cash,” Krebs said, “then it might be worth paying the higher interest rate in exchange for being able to tap into equity.” Urgent needs can refer to medical bills or urgent expenses. It would be an emergency, and I advise against doing so if possible.

Krebs also suggested considering a reverse mortgage to pay off your mortgage using the equity in your home, then borrow some of the remaining equity, either as a monthly payment, lump sum, or line of credit. . But do your own research before choosing this option.

You also said that your mortgage loan has been transferred to the lenders and – according to you, that you will be 90 when it is paid off – the term has been extended by 20 years. I don’t know why it happened. Krebs agreed that made no sense.

If possible: You may have entered into a loan modification with the old or new lender. A loan modification is a mutual agreement, where the borrower and the lender sign a written agreement modifying the terms of the loan. In your case, the loan maturity was probably extended by 20 years, Krebs explained.

But “it is neither normal nor legal for the lender to unilaterally extend the 20-year term,” he added. So check if you have signed a document extending the term of the loan.

And back to the issue of refinancing with one final caveat. The mortgage rate for a 15-year fixed rate mortgage increased slightly to 5.54%. If you refinance, the price of being debt free sooner can eat into your monthly budget.

By emailing your questions, you agree to them being posted anonymously on CNET. By submitting your story to Dow Jones & Company, CNET’s publisher, you understand and agree that we may use your story, or versions of it, in all media and platforms, including through third parties..