15 year vs 30 year
So I was thinking of re-financing. I have a 30yr fixed and was thinking about 15yr fixed because of the lower rates. The difference on conforming (417k) is about .75%.
My monthly payment with 30 yr fixed was 2082 (4.375%) and with 15yr fixed was 2981 (3.5%) so about 900 more.
What I found was that if I paid extra $8400 (900*12) every year my TOTAL interest was not very much off, I would pay ~160k with 30yr fixed and ~120k with 15yr fixed. (I think if I paid 900 per month extra instead of waiting till end of the year the delta would be even smaller). And my loan pay off period of 30 yr fixed was ~16years vs 15 years with 15 yr fixed.
Does this make sense? If so, it just makes sense to go with 30yr fixed because it affords you the flexibility with very little penalty. Of course you have to have the disciple to pay the extra 8400 towards principal down payment but seems like a good idea overall.