Posted on: 10th Oct, 2010 10:58 pm
If I have a mortgage of 189K at 5.375% that I have been paying for 8 years. Now we have been offered 3.9% for a new 30 year loan, paying 1 point and some other fees (appraisal). The monthly payments are lower, but aren't I going to pay more interest overall? If I plan on renting the house in a few years this will be good, because I can probably become cash positive on the rent. Is this a good reason to refi?
hi artwongod,
as the rate offered to you in quite low, you can go ahead and refinance the loan. however, you should note that while you refinance the mortgage, you'll be liable for paying the closing costs. you will be able to offset the closing cost only if you stay in the property for a long period of time. so, you should refinance the loan only if you plan to stay in the property for a longer period of time.
take care.
as the rate offered to you in quite low, you can go ahead and refinance the loan. however, you should note that while you refinance the mortgage, you'll be liable for paying the closing costs. you will be able to offset the closing cost only if you stay in the property for a long period of time. so, you should refinance the loan only if you plan to stay in the property for a longer period of time.
take care.
THANK YOU FOR THE ADVICE, I JUST REALIZED MY CLOSING COSTS WILL NOT BE DEDUCTIBLE FOR THIS YEAR, BUT WILL BE OVER THE LIFE OF THE LOAN. THAT IS OK BECAUSE WE'LL HOLD ONTO THE PROPERTY FOR A RENTAL, OR UNTIL SUCH TIME THE MARKET IS ROBUST AND WE CAN GET APPRECIATION ON THE HOUSE ITSELF. NICE REPLY. :lol:
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