No Benefit To Refinancing

Chad and his wife are about a year into a 30-year fixed mortgage. Should they consider refinancing to a 15-year fixed mortgage or pay extra toward the 30-year mortgage?

QUESTION: Chad in Raleigh and his wife are on Baby Step 6. He’s about a year into a 30-year fixed mortgage. Should they consider refinancing to a 15-year fixed mortgage or pay extra toward the 30-year mortgage? Dave says the only reason they should consider refinancing is interest rate.

ANSWER: The only reason you would refinance from a 30 to a 15 is to save on interest rate. If you pay a 30 like a 15, it pays off in 15. There’s no benefit to refinancing unless you’re saving on interest rate. You’re not going to beat your current interest rate. I’m just going to keep this mortgage and start throwing money at it.