Posted on: 03rd Jul, 2011 04:50 pm
My wife and I purchased a home in CT in 2007 and refiinaced in 2009. Our monthly payment is approx. 2400.00, which includes $1730 P & I and $630 escrow payment. Our current APR is 6%. Balance 278,000. We have done a lot of updates to the home including premiuim vinyl siding, but zillow has our home valve at only 224.000.
We would like to get our P & I down around $1200/month.
My credit score is around 700 and my wife's is around 600. We are both well employed and our yearly income is approx. 150,000.
What do you reccomend for us to reach our goal without a lot of fees or addtional costs?
We would like to get our P & I down around $1200/month.
My credit score is around 700 and my wife's is around 600. We are both well employed and our yearly income is approx. 150,000.
What do you reccomend for us to reach our goal without a lot of fees or addtional costs?
hi carlhestad,
in order to lower your principal amount and the interest rate, you'll have to refinance the mortgage. in order to refinance the mortgage, you should have equity in your property. unless there is equity in the property, none of the lenders will be ready to offer you a loan refinance. however, it remains a fact that while you refinance your mortgage, you will be liable for paying the closing costs.
thanks
in order to lower your principal amount and the interest rate, you'll have to refinance the mortgage. in order to refinance the mortgage, you should have equity in your property. unless there is equity in the property, none of the lenders will be ready to offer you a loan refinance. however, it remains a fact that while you refinance your mortgage, you will be liable for paying the closing costs.
thanks
Refinancing will have to deal with your lenders requirements. In order to get what you want, might as well be a better step if you will seek a mortgage broker that can assist you with your plans. Let your expert evaluate you state and analyze a good plan for you. It is easier this way.
Carl I hate to say it but with a balance of $278000, there's an extraordinarily small chance of your finding a lender who'll allow you to pay $1200 per month. That number is tiny in relation to your income. I'm assuming that you're only speaking of principal and interest, of course, in this case. Nevertheless that's something less than $4 per thousand when you calculate it (if my in-the-head assessment is right). I don't know how you'd wrangle it - your equity position (lack thereof) isn't going to do you much good, either.
I think you may be tilting at windmills here, I'm afraid.
I think you may be tilting at windmills here, I'm afraid.
If you have an FHA loan, or a loan owned by Fannie Mae, or Freddie Mac, you may qualify for their 125% refinance options. As George mentioned, your target payment is a little off. Even with 278k as your balance, at a 4% rate the payment is over 1300. 5% is almost 1500, just FYI. Check to see who owns your loan, and contact a loan officer in your area to see if anyone can help on the refinance options.
Zillow estimates can be way off in either direction so the $224,000 value they put on your property can not be relied on especially since you have made improvements. Still having purchased in 2007 which was a peak year in many areas of the country for home prices you now owe more than the property could sell for. Unless you apply for a loan and get an actual appraisal ordered by a lender you won't know for certain the property's current appraised value.
You might qualify for the Home Affordable Refinance program but my guess is you will be looking at an interest rate of around 5% or near $1500 a month for principal and interest on a 30 year fixed rate loan. If your paying $1730 P&I per month now that would still be a decent monthly savings even though you would be extending the loan term by maybe 2 years, assuming your current loan is a 30 year fixed rate. You could of course make extra principal payments to shorten the loan period if you so decide.
One problem though could be your wife's credit score. Many (most?) lenders may require a minumum credit score of each borrower to be 620 or highe to qualify. This along with checking to see who owns your loan are things you will need to look into.
You might qualify for the Home Affordable Refinance program but my guess is you will be looking at an interest rate of around 5% or near $1500 a month for principal and interest on a 30 year fixed rate loan. If your paying $1730 P&I per month now that would still be a decent monthly savings even though you would be extending the loan term by maybe 2 years, assuming your current loan is a 30 year fixed rate. You could of course make extra principal payments to shorten the loan period if you so decide.
One problem though could be your wife's credit score. Many (most?) lenders may require a minumum credit score of each borrower to be 620 or highe to qualify. This along with checking to see who owns your loan are things you will need to look into.