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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127815  
Subject: Re: Refinance help needed Date: 11/23/2012 12:57 PM
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Hi rhit,

So, am I correct in thinking that this saves me $2142-$299=$1843 or am I missing something?
If all you are considering & measuring is what you have detailed here, yes you are missing quite a bit.

You appear to be entirely focused on the money you'll "save" by rushing the end of your interest payments, and appear to be ignoring the money you'll lose by channeling money away from your compounding growth opportunities, as well as the cost risks of reaccessing your cash if you bury them into illiquid real estate equity (by accelerating the elimination of your leverage.)

When/if you fully understand the bigger picture, you're far more strongly advised to take the longest amortization terms available (30+ years) on as much of your real estate value as your reliable cashflow and reserves will safely support (85-90% if possible,) and accelerating the accumulation of a liquid, compounding, long-term-positioned growth account.

By doing so you'll actually eliminate the liability of your mortgage FASTER than how you are going about it now, as you'll reach the point where you *COULD* simply stroke a check to pay off the entire amount (even if you increased it to 85-90% of your home value) sooner than you will by sending smaller checks each month.

Dave Donhoff
Leverage Planner
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