Posted on: 08th Sep, 2011 08:46 pm
i started to refinance my house. mortgage company offered two options:
1. 4.625% no mortgage insurance
2. 4.25% with monthly mortgage insurance $163.37.
the loan amount can go 95% of current appraisal value.
which option should i take? your expert's advice is highly appreciated!
nate
1. 4.625% no mortgage insurance
2. 4.25% with monthly mortgage insurance $163.37.
the loan amount can go 95% of current appraisal value.
which option should i take? your expert's advice is highly appreciated!
nate
Hi programmerpeter!
Welcome to forums!
In my opinion, it will be better if you could go for 4.625% with no mortgage insurance. If you take this option, then you will be liable for paying only the mortgage interest payments and no mortgage insurance premiums. You will be able to save the money that you may have to otherwise pay as insurance premium.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
In my opinion, it will be better if you could go for 4.625% with no mortgage insurance. If you take this option, then you will be liable for paying only the mortgage interest payments and no mortgage insurance premiums. You will be able to save the money that you may have to otherwise pay as insurance premium.
Feel free to ask if you've further queries.
Sussane
Well, Mortgage insurance is only temporary. for the long long term,
I think 4.25% with mortgage insurance is better.
I think 4.25% with mortgage insurance is better.
It is a little difficult to advise what we might think the better option because there is not a lot of infomation provided.
There are things that would influence what I might recommend:
1. How long do you plan on living in the property?
2. While the mortgage guidelines allow up to 95% of the value, do you expect that is what it will be? If you end up with lower percentages of the value, the lower the percentage the more likely the lower rate with PMI would be better because PMI would be gone fairly quickly.
3. What is your current rate and monthly principal and interest payment and how much is the monthly payment lowered at 4.625% and how much lower at 4.250%?
4. Is your income under $100,000? If it is, the PMI payments are tax deductable just like interest is tax deductible.
There is no simple or correct answer that can be provide to your very general question.
There are things that would influence what I might recommend:
1. How long do you plan on living in the property?
2. While the mortgage guidelines allow up to 95% of the value, do you expect that is what it will be? If you end up with lower percentages of the value, the lower the percentage the more likely the lower rate with PMI would be better because PMI would be gone fairly quickly.
3. What is your current rate and monthly principal and interest payment and how much is the monthly payment lowered at 4.625% and how much lower at 4.250%?
4. Is your income under $100,000? If it is, the PMI payments are tax deductable just like interest is tax deductible.
There is no simple or correct answer that can be provide to your very general question.
Thank you for your information. My house worths about 300k. I am taking
95% loan now. I am thinking to keep the house for 10 years.
95% loan now. I am thinking to keep the house for 10 years.
Any more input? Thanks!
Hi Guest,
In my opinion, as you will be staying in the property for the next 10 years, 4.625% with no mortgage insurance will be a good option to refinance the loan provided you can afford the payments.
Thanks
In my opinion, as you will be staying in the property for the next 10 years, 4.625% with no mortgage insurance will be a good option to refinance the loan provided you can afford the payments.
Thanks
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If you will have a 95% of value mortgage for about ten years on a home valued at $300,000, the 4.625% option with Lender paid Mortgage Insurance would be a good option.