Here is my 2 cents worth…
Re-financing is dangerous “if” the following happens. If for some reason your income changes and you are stuck with the lower paymnet for the long term then you will probably spend just as much if not more in interest charges over the term.
On the other hand, given the numbers you have shown and the fact that you have an extra $1241.00 a month , then it can make great sense to do so “If” you apply that extra amount to your mortgage payment which will accelerate your mortgage payment and will save you a TON of money . You will then have made it worth while to do so. Instead of paying 92% interest which most loans do in the beginning you will actually be wiping out principal and saving a ton on the interest charges you would normally have paid just paying the reduced amount of $2466.00. This is assuming your goal is to be debt free.
Thank you for your input.
Debt free? Yes, that would indeed be my goal. As it stands now, after looking more carefully into my debt (AFTER my post here) I realize that I actually pay MORE a month between all my bills, than my wife and I actually bring in. AND, this does not even include food and groceries. I realize it’s time to also cut out some “monthly” items that I can probably do without. While the refinance will most definitely help, I realize that my habits need to change, dramatically, for the plan to play out as intended.
I thank you, again, for your response and input.
We are in the same situation and we did recently refinance. It really hurt me to do it, but the rates are low right now and I think they are going to be cut again today. We went from two incomes to one (husband just recently got his family therapy license) and we did not have the income to cover our expenses. We’ve been cutting back for two years, but we finally had to face the facts. In those two years, though, we’ve gained alot of practice in *not* spending or using credit cards. Although we didn’t want to refinance, we realize we could be in a worse situation. It has been a very difficult road to go from consumer to a deliberate spender, but it can be done. Good luck!