Refinancing question...PLEASE HELP!

[craftgenius]

A co-worker of mine is trying to talk me into refinancing my home loan and converting my current standard 30-year fixed loan with standard interest rate of 5.6% into a simple interest loan. He tells me that the difference between this loan and what I currently have is that the interest is calculated differently, allowing me to pay more towards my principle each month and thus paying off my house quicker. It sounds good but I wonder if it is all a crock of S*^%. I did a search online and one site that I found said that the simple interest loan is not the way to go. Wouldn't I be able to achieve the same goal of paying my principle down quicker, if I just started sending an additional amount of money each month to go towards my principle???

Help...I'm no expert on these type of matters. Mortgage people can make something sound so wonderful, and end up getting you in a world of trouble. DH and I are happy with our current mortgage interest rate and are about to look into getting our PMI dropped...the money we save on PMI, we can continue paying towards to principle.

[udsweetpea]

If you're happy with your current mortgage, then don't refinance. Basically, any interest rate offer in the 5s these days is a scam to get you to pay points and will screw you over.

ETA- I just ran some hypothetical numbers, and the money you'd save with a simple interest loan would be the same as how much it would cost to close on a refinance.

[~queen~]

Hey girl.

Don't do it. Keep your fantastic interest rate that you have set for 30 years and say no thank you. Sounds to me like he gave you the 'in the long run' talk but didn't mention the thousands of dollars that it will cost you in fees to refinance.

You are on the right track with your own plan.

Any new pics of Claire? :)

[kam]

Keep what you've got. As many people have found out this year, if it sounds too good to be true, it is.