Pay A Fee, Or Pay Double?

Barb has a great mortgage rate. Should she refinance and pay a fee to get a better rate?

QUESTION: Barb has a 30-year fixed mortgage at 6.375% and they want to go to 15 years. They have been offered 5.625%, but there’s a fee with that. Should they refinance?

ANSWER: There’s no point to refinance. The reason to refinance is to get a better rate, and you already have a great rate. Just pay the difference between a 30-year payment and a 15-year payment, and it will pay off in 15 years.