Posted on: 29th Sep, 2010 03:08 pm
i have about $137,000 balance on my current mortgage, which is on a variable rate. it's currently at 3.25%. for the past several years, i've intended to refinance to a fixed rate, but every year my interest rate has dropped to lower than i could get for a fixed rate. we've owned our house for nearly 9 years.
several months ago, we went under 80% on our loan to value ratio, so we shouldn't need credit life anymore. i've always heard to get rid of credit life as soon as possible to save money.
my dilemma now is that i'd need to refinance in order to get rid of the credit life, and that would be at a rate of at least 4.00-4.25% currently. i don't know how much the credit life is costing me each month, so i can't tell if refinancing and taking the higher rate would be worth it compared to the savings of not having to pay for the credit life.
(it's not worth it to me to save $100 a month on the credit life if the new interest rate raises my payment $175.)
how can i find out how much i'm paying for credit life currently? once i find that out, is there a calculator available to compare the cost of refinancing without credit life to keeping my current situation as is?
several months ago, we went under 80% on our loan to value ratio, so we shouldn't need credit life anymore. i've always heard to get rid of credit life as soon as possible to save money.
my dilemma now is that i'd need to refinance in order to get rid of the credit life, and that would be at a rate of at least 4.00-4.25% currently. i don't know how much the credit life is costing me each month, so i can't tell if refinancing and taking the higher rate would be worth it compared to the savings of not having to pay for the credit life.
(it's not worth it to me to save $100 a month on the credit life if the new interest rate raises my payment $175.)
how can i find out how much i'm paying for credit life currently? once i find that out, is there a calculator available to compare the cost of refinancing without credit life to keeping my current situation as is?
Your mortgage statement - assuming you get one - ought to break down your payment and reflect the precise amount you're paying for the life insurance.
I wish you hadn't purchased it to begin with - it's a big ripoff and only a huge money-maker for the lenders and the insurers. You (and anyone else who's reading this) are so much better off buying a real insurance policy from a solid company so that your heirs can decide what to do with the proceeds when the time comes.
I wish you hadn't purchased it to begin with - it's a big ripoff and only a huge money-maker for the lenders and the insurers. You (and anyone else who's reading this) are so much better off buying a real insurance policy from a solid company so that your heirs can decide what to do with the proceeds when the time comes.
George answered the question about credit life. Regarding the actually refinance, rates are at historic lows. Even though you've been lucky by having your rate drop; it will eventually begin to fluctuate up once the market turns around. If you're able to refinance, I would definitely take advantage of mortgage rates while they last.
