Posted on: 16th Jan, 2008 04:46 am
we bought a new home in september. we put 15% down and the loan amount was $2,50,000. the interest rate that got was ok for us, 6.25%. i know the rate's pretty good but we can't afford that much, need to curtail a bit of our monthly payments so that we benefit from refinance. right now our monthly payment is around 1540. but we would like to reduce it to about $1350. which is the right way to do is? any suggestions other than refinance?
Has the house gone up in value? What is your mortgage insurance per month......a fixed IO loan may work for you.....
why did you take a loan you cant afford in the first place?
well interest droped a bit since september and if you need temporary help a no closing cost or low closing cost refi into an interest only or a 40 yr fixed rate could help you out. You are likely to stay at same interest rate but your pament will be less and you get to skip a month of payments wich you can save for future payments or use to ofset costs for the new loan. However do understand that you will be paying less principle on your loan and in case of interest only no principle at all.
well interest droped a bit since september and if you need temporary help a no closing cost or low closing cost refi into an interest only or a 40 yr fixed rate could help you out. You are likely to stay at same interest rate but your pament will be less and you get to skip a month of payments wich you can save for future payments or use to ofset costs for the new loan. However do understand that you will be paying less principle on your loan and in case of interest only no principle at all.
Looking at your situation right now is a good time to refinance. You can get a 30 yr fixed at 5.5% or interest only at 5.75% and you can probably get your closing costs covered. Let me or any of the other lenders know if you need more info.
You can try an ARM as their rates maybe lower than 5.5% depending on your LTV/credit score.
Remember that the lender will use the PURCHASE price for the value of the home. Some lenders will use an appraisal after 6months in the home....MOST lenders will require 1yr before using an appraisal.
Remember that the lender will use the PURCHASE price for the value of the home. Some lenders will use an appraisal after 6months in the home....MOST lenders will require 1yr before using an appraisal.
The only way to reduce your payment is to refinance. Since the 30 year fixed rate is 5.50% today with no points, that brings the payment down to $1,447.86. Since that won't bring your payment down to the level that you want there are two other options. First, if you plan on being in the home long term, you can look at buying down the rate (which can be rolled into your loan) at a rate of 5.00. The 5% flat rate will give you a payment of $1,395.74.
The second option would be a 30 year fixed interest only mortgage. That rate is a little higher but the payments would only be $1248.44 with zero points. Then you can just pay extra when you have it.
The second option would be a 30 year fixed interest only mortgage. That rate is a little higher but the payments would only be $1248.44 with zero points. Then you can just pay extra when you have it.