Now that interest rates are on the rise, many are wondering if it makes sense to refinance so they can get rid of their mortgage faster, or if they should keep their existing mortgage.
In this video, Dave Ramsey answers Eric’s question: “If I have a 30 year mortgage, but know that you recommend a 15, should I refinance or not?”
Dave tells Eric that since he has a 3% rate, which is great, he should keep his current loan. If he pays extra on a 30 year to where the amount is the same that it would have been on a 15, then it pays off in the same time. Don’t refinance to pay a 30 like a 15 if you have an advantageous interest rate. BUT, he says, wait and do this until he gets rid of his car loan. Once he is at baby step 4, debt free except for the house, THEN pay extra on your house.
Doing the steps out of order can wreak havoc on your financial health. For more information on the baby steps, visit: https://www.daveramsey.com/baby-steps
If you’re in a bad loan, or a high-interest loan, the best place to start is to refinance with a Churchill Mortgage, whom Dave trusts: https://www.daveramsey.com/recommends/mortgage-refinance
Another helpful resource: do some digging on your payment with Dave’s Mortgage Payoff Calculator! https://www.daveramsey.com/mortgage-payoff-calculator
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