I see your point about flexibility, but refinancing can still make sense depending on your goals. When I refinanced my VA loan last year, I went from a 30-year to a 15-year term. Sure, the monthly payments jumped, but the interest savings were huge—like tens of thousands over the life of the loan. If your income is stable and you have a solid emergency fund already, locking in those savings could outweigh the flexibility of extra payments. Just my two cents...
I refinanced my VA loan a couple years back too, and honestly it was one of the better financial moves I've made lately. Went from something like 4.5% down to 2.75%, kept the 30-year term though because I wasn't comfortable with the higher monthly payments at the time. But even without shortening the term, the savings have been pretty noticeable—like $200 a month less in payments.
I see your point about the flexibility issue. Personally, I prefer keeping payments manageable and then throwing extra cash at the principal when I can. Gives me peace of mind knowing I can dial back if needed. But hey, if your job is steady and you've got that emergency fund padded out, going for the shorter term could definitely pay off big time. Just make sure you're comfortable locking into that higher monthly obligation long-term.
I refinanced my VA loan about three years ago, and I totally get where you're coming from. Dropped from around 4.25% down to 3%, and at first, I was tempted by the shorter term too. But after crunching the numbers, I decided to stick with the 30-year option for similar reasons—keeping monthly payments manageable and flexible.
A couple things I'd suggest thinking about based on my experience:
- If you do go with the longer term, consider setting up automatic extra payments toward principal when you can afford it. Even small amounts here and there can shave years off your loan without locking you into higher monthly obligations.
- Make sure you're factoring in closing costs when calculating your break-even point. Sometimes people overlook that part, but it's important to know exactly how long it'll take before you start seeing real savings.
- Also, rates have climbed a bit lately compared to a couple years ago, so double-check current offers carefully. It might still be worth it, but just make sure you're getting enough of a rate drop to justify refinancing.
Personally, I've found that having lower required payments gives me peace of mind—especially since life has a funny way of throwing curveballs (car repairs, medical bills...you name it). But everyone's situation is different. If your income is stable and you've got a solid emergency fund built up already, shortening the term could definitely save you thousands in interest over time.
Either way, refinancing can be a smart move if done thoughtfully. Good luck!
You make some solid points, especially about flexibility. But I'd gently push back on the idea of sticking with a 30-year just for lower payments. Sometimes, having that shorter term can be a powerful motivator to stay disciplined financially. I've seen clients who intended to make extra payments but...life happens, Netflix binges happen, and suddenly those "extra" payments vanish into thin air. Just something to consider—sometimes forced discipline isn't all bad.
"life happens, Netflix binges happen, and suddenly those 'extra' payments vanish into thin air."
This rings true for me. Planned to pay extra each month on my 30-year, but honestly...unexpected repairs and random expenses always seemed to pop up. Shorter terms can be stressful, but that forced structure does have its perks.
