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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4543
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I have a mortgage with a payoff of $389,000. My current loan

Customer Question

I have a mortgage with a payoff of $389,000. My current loan is a 30-year fixed at 3.65%. My payment (including taxes and insurance) is $2,454.20. I have 319 months left on my mortgage.
I have been offered a modification (I am one month behind on my mortgage) for a 480 month term, 3.65%, at $2,208.62 per month (includes taxes and insurance).
I usually pay $2,500 per month. Would I be better off taking the modification and paying the $2,500 per month and allocating the extra $292 to the principal? Will that pay off my mortgage faster or should I keep my current mortgage?
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Friend,Hello and welcome. Thank you for providing an opportunity to assist you.YES, it will pay off the mortgage faster but only by few years. The reason is -- you would save $292 towards principal. However, taking into account the closing costs that you will pay, you will have some 10-12 months of break even. After that you will start allocating towards principal.Having said this, whatever the small amount, it is always better to pay more towards principal. You can go ahead with this option. It will certainly pay up your mortgage faster. I am sure this would help.You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.Warm Regards,