Posted on: 27th May, 2010 11:26 am
Hi all, new member here.
Here is our current situation:
- owned a townhome for 2 yrs now (plan on staying another 5-7 yrs)
- we have approx 7.5% equity
- 30 year fixed @ 6.25% (no PMI)
- excellent credit
Is it going to be worth it for us to re-fi into a new 30 yr fixed? Since we don't have 20% equity, I understand we'll either have to pay PMI or pay a higher interest rate to account for no PMI. So I'm not sure how much lower we can get than 6.25%.
Appreciate any insight.
Here is our current situation:
- owned a townhome for 2 yrs now (plan on staying another 5-7 yrs)
- we have approx 7.5% equity
- 30 year fixed @ 6.25% (no PMI)
- excellent credit
Is it going to be worth it for us to re-fi into a new 30 yr fixed? Since we don't have 20% equity, I understand we'll either have to pay PMI or pay a higher interest rate to account for no PMI. So I'm not sure how much lower we can get than 6.25%.
Appreciate any insight.
Hi shalinp!
Welcome to forums!
As you do not have equity in your property, it will be difficult for you to qualify for a refinance. Lenders will want you to go for a private mortgage insurance (pmi). You will get the interest rate equivalent to the one prevalent in the market. However, you must remember that you will be liable for the closing costs. You will be able to offset the closing cost if you stay in the property for a longer period of time.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As you do not have equity in your property, it will be difficult for you to qualify for a refinance. Lenders will want you to go for a private mortgage insurance (pmi). You will get the interest rate equivalent to the one prevalent in the market. However, you must remember that you will be liable for the closing costs. You will be able to offset the closing cost if you stay in the property for a longer period of time.
Feel free to ask if you've further queries.
Sussane
If your loan is owned by Freddie or Fannie, you might be eligible for the DU refi plus program. Depending on the lender, you can go as high as 125% LTV with no PMI
