Pay A 30 like A 15

JR is thinking of refinancing to get a better rate on his mortgage, but Dave doesn't think that's necessary.

QUESTION: JR and his wife have been in their house for 3 years. It’s in her name and is on a 30-year fixed rate of 6.625%. Should they refinance to a 15-year rate?

ANSWER: You’ve got a good rate. You might save a half point, but that won’t balance out with the closing costs you’ll pay. If you want to pay it off in 15 years, calculate the difference between the 30 and 15 year payments, and pay the difference.

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