Refinance to a 20-yr : I'm benefiting from it

[good_credit]

I have a 30-yr fixed (converntional ) since March,2010.  The intrest rate is 5.15%.   Monthly payment is $821. 

I currently make $1000 payment every month so that some monies go towards princiapl.

A 20-yr fixed right now, would increase my montly payments by $90 (rate is 4.3%).  The costs for this loan are about $2500.

Should i go for refinacing . I'm in two minds. Any suggestions are greatly appreciated.

[ShanetheMortgageMan]

You'd have to compare how quickly you are going to pay off your mortgage now by making $1k/mo payments vs. how quickly you would be paying off the new proposed mortgage if you were to make $1k/mo payments.

Ask your loan officer for an amortization schedule showing you the two differences.

Ask your loan officer to calculate the total amount of payments you'd be making on both loans.

The compare the difference, if the new mortgage would make your total payments at least $2,500 less than your current mortgage would, then from a $ standpoint the refinance would make sense if you were to stay in the mortgage for the entire life of the loan.  But if you were only going to have the loan for a year or two, and the savings over that time isn't as much as the $2,500 you initially have to pay, then it would not be worth it from a $ standpoint.  You also have to factor in the cost of inflation and other varibles to determine how much of a savings over the life of the loan is worth the initial $2,500 cost.