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Steve: This is stevecurrington.com and The Steve N Tyler Show, episode number 71.
[music]
Recording: Welcome to Steve N Tyler Show, with stevecurrington.com and Tyler Wyburn. They’re talking about everything you need to know about mortgages, home loans and more. Nobody knows mortgages like these two. Get ready because here’s Steve and Tyler.
Steve: What up Tyler?
Tyler: Good morning.
Steve: Hey man, did you get a doughnut yet?
Tyler: Not yet.
Steve: Man, you’d better get a doughnut. I brought Colorado Springs Mortgage doughnuts today because I was trying to wake Tyler up. It’s early. It is early in the morning. Guess what we’re going to do today, Tyler?
Tyler: What?
Steve: We’ll fucking get my mic to fit right on my thing. Here’s what we’re going to do. [Recording:] We’re going to get lots of goals.
Tyler: For playing soccer?
Steve: Yes. Remember, this is like 35 seconds long. Right now I’m doing the face like I’m making this sound. Hey, we’re talking about Tulsa mortgage today. What about reducing my interest rate, but also reducing my term on a refinance?
Tyler: Sounds genius.
Steve: There’s a concept that works, what do you think about that?
Tyler: Love it.
Steve: Does everybody understand that? What we’re talking about is, okay maybe I’m on a 30 year fixed mortgage. I talked to a lady yesterday when I was meeting with Bob and she’s on a 20, and so she was like, “Should I refi?” I’m like, “Well, yes, if you can lower your rate and your term.” If you’re on a 20, going to a 15 isn’t that big a deal. Also, if your rates’ higher, it’s definitely not a big deal because you’ll probably swap payments. You know what I mean?
Tyler: Yes.
Steve: What about that? What about reducing my interest rate and my term? Well, it can be a good thing. It just depends on what your aptitude is for potentially increasing your payment, because even though, Tyler, as we know, you’re going to go from a 6% interest rate down to 4% interest rate, but depending on your loan size it may not necessarily have a big enough impact to where it reduces your payment, but it would reduce your term.
And here’s the benefit of reducing your term. Less interest, you’ll pay less interest over the life of the loan. We’ve talked about this before, so this isn’t new. On a 30 year you make 360 payments. On a 15 you make 180. This is what I tell people. I do a 15 year every time. If I do a loan, I do a 15. Here’s why– or a 10- because I’m going to make 180 payments and you’re going to make 180 more. Boom, what do you think about that?
Tyler: True story.
Steve: Right, that’s the truth. The Koala gets evicted on that deal. You make 180 more payments than me. And listen, when I did my last loan. It was 460 bucks more a month to do a 15 versus a Colorado Springs Mortgage 30. I could pay, let’s say, 2000 a month for 30 years or I can pay 2460 a month for 15. I’m thinking you might want to find a way to find some discretionary income. Maybe not have that $600 car payment. Maybe have a $200 car payment instead and then you can pay your house off a lot quicker. Just my humble opinion. You know what I’m saying.
Recording: You’re listening to The Steve N Tyler Show. Don’t forget to visit our website at getkoalified.com.
Steve: I recorded that with Marshall, go Marshall. Changing your loan term with your rate may also be a good reason to refinance your mortgage from a 30 to a 15. In fact, this is one of the most common reasons people decide to refinance in the first place. This gives an example, like I just did of if you’re at 8% on an 125,000 loan and you go to six and a half percent. We know rates are a lot lower than that right now.
Then it goes to that scenario of what it saves you. Let’s use this example. That’s 125,000 on a loan, 8% versus six and a half for a 30 year. But if you move your 15 year down to 5.75, which is about right, it’s about 3/4 quarters of a point better, typically, right? Then the monthly payment for a 15 year loan will actually increase from the 30 of 917 to 1038 per month on a 15. Do you see that, on a 125,000 loan.
917 versus 1038. That doesn’t look right. But it must be because it’s in the book, It’s in this book that we downloaded, that gives us a little bit of an outline of where to start. But here’s what we found out, Tyler We found out the book is wrong a lot. The book is wrong a lot. That brings up a very good point. I’ve hit this plenty of times if you listen to other podcasts. Be careful what you go Google and find out online. Be resourceful and go figure things out, but I always say, trust and verify. It’s easy for you to go do a calculator, I can do it on my phone but in case people don’t know, you can go to Google and you can say, “Okay Google, mortgage calculator.” On the main page of Google, you see that on my phone, there’s a mortgage calculator, so let’s try it. They’re saying, on a $125,000 loan, if you did a 30 year at 8%, is that right? Or are they comparing it the six and a half percent? It must be the six and a half percent.
Tyler: It’s six and a half.
Steve: The principal and interest payment on a $125,000 loan for a 30 year is $790. Trust and verify. If you change that from a 30 down to a 15 year term on the same $125,000 loan and you did a 5.75% interest rate, then the payment is $1038, right?
It is 1038, but the difference was 790. That’s really about 248 bucks a month increase in that scenario, not what the book say. This is a perfect example of why you shouldn’t just go find something online and trust. You need to call a Tulsa mortgage lender, like stevecurrington.com and I can do the math for you.
Look, I’m not a genius, guys. I’m in the mortgage business. I’ve got all kinds of tools at my fingertips, and you know, when someone asks me what their payments going to be, do you know what I do? I say, “Okay Google, mortgage calculator” and it pops up. You don’t have to be a genius to figure these things out. It calculates it for you. Just go plug in the numbers and it tells you what it is Colorado Springs Mortgage.