Posted on: 27th Apr, 2009 07:12 am
Hi All,
I'm currently in year 12 of a 30 year mortgage on a rental property. I financed $96K at 7.5%. I plan on retiring in 2020. I want the house paid off when I retire. Here's my question. Do I refinance the existing $82K loan balance with a 10 year mortgage or should I just pay a little more each month in addition to my regular payment to have it paid off in 2020?
Thanks!
I'm currently in year 12 of a 30 year mortgage on a rental property. I financed $96K at 7.5%. I plan on retiring in 2020. I want the house paid off when I retire. Here's my question. Do I refinance the existing $82K loan balance with a 10 year mortgage or should I just pay a little more each month in addition to my regular payment to have it paid off in 2020?
Thanks!
Great posts from Jveenstra, nicely broken down into the pertinent details. Refinancing is often a good idea if you can cut down the interest rate without incurring huge fees at the front end.
Lower interest rates = more of your payments actually paying off the principal debt = debt free faster.
Lower interest rates = more of your payments actually paying off the principal debt = debt free faster.
we owe around $185,000 (not sure since we don't get paper statements anymore) on a 30 year loan with 27 years left on it. i think the original amount of the loan was $195,000 and the interest rate is 6.5%. our monthly payments are just under $1,400 but we pay about $20 extra dollars a month.
we have been wondering the past few months if we should refinance and was actually contacted by the bank that holds our current mortgage last week. they say that if we are approved, we could get a new 30 year loan at 5.375% and that our monthly payments would lower to $1,221.12. we were told that we would have to pay a $345 fee just to have the underwriters look at the application to see if we can be approved. if we aren't approved we don't get the $345 back.
my question is, is this fee normal or even legal? should we refinance and make the same payments to help pay down the loan faster? our credit score is 719 and we don't have any late payments in the last 12 months. we do have a foreclosure on our credit that is only 5 years old. we only have 2 credit cards with a total balance of about $4,000 that we hope to pay off with a nice tax return. my husband's raise should happen in march but we don't know what it will be yet. should we wait until he gets his raise? we were told that we wouldn't have to show any documentation. we just aren't sure what to do. i don't like the rate we have now and we are only into it 3 years, but the property values have gone down about $40,000 over the last 2 years so is it even a good time for us to refinance even to get a better interest rate? help, please!!
we have been wondering the past few months if we should refinance and was actually contacted by the bank that holds our current mortgage last week. they say that if we are approved, we could get a new 30 year loan at 5.375% and that our monthly payments would lower to $1,221.12. we were told that we would have to pay a $345 fee just to have the underwriters look at the application to see if we can be approved. if we aren't approved we don't get the $345 back.
my question is, is this fee normal or even legal? should we refinance and make the same payments to help pay down the loan faster? our credit score is 719 and we don't have any late payments in the last 12 months. we do have a foreclosure on our credit that is only 5 years old. we only have 2 credit cards with a total balance of about $4,000 that we hope to pay off with a nice tax return. my husband's raise should happen in march but we don't know what it will be yet. should we wait until he gets his raise? we were told that we wouldn't have to show any documentation. we just aren't sure what to do. i don't like the rate we have now and we are only into it 3 years, but the property values have gone down about $40,000 over the last 2 years so is it even a good time for us to refinance even to get a better interest rate? help, please!!
in all likelihood, a lender wouldn't charge a fee that wasn't legal, such as that $345. you needn't do business with that lender if you feel that their fee is too high. if it is an appraisal fee, then the funds are going directly to an appraiser. it doesn't sound like that, however. honestly, though, if that's a fee simply so they can look at your credit and give you an idea about qualifying, i have to say you ought to look elsewhere.
what the value of homes in your area has done to your situation is impossible to assess without real information. values declining by $40000 in 2 years isn't enough detail to let us know how that affects your situation specifically.
it's well worth your trouble to check into refinancing, since you ought to be able to save some. it never hurts to inquire.
what the value of homes in your area has done to your situation is impossible to assess without real information. values declining by $40000 in 2 years isn't enough detail to let us know how that affects your situation specifically.
it's well worth your trouble to check into refinancing, since you ought to be able to save some. it never hurts to inquire.
i have a loan for 7 years now. the loan is 100,000 and the interest rate is 5.625. my monthly is 575.66. my pricipal on loan now is 85,000. does it worth for me to refinance at 85,000 at 5.5 interest rate with no fee, or should i stay at my current loan that i have now. i am planning to stay in this house for a long time. please someone help me what should i do to make better sense on my financial sisuation. thank you for your wise suggestion
Confuse,
I am sure you could get a lower rate than 5.5%. But if it is at no cost to you than why not even if you saved $20/mo. and it didn't cost you a penny to do so then its still a benefit. If you plan on living in the home for a long time do some research on different mortgage rates right now and see what you come up with rates are below the 5.50%
I am sure you could get a lower rate than 5.5%. But if it is at no cost to you than why not even if you saved $20/mo. and it didn't cost you a penny to do so then its still a benefit. If you plan on living in the home for a long time do some research on different mortgage rates right now and see what you come up with rates are below the 5.50%
an eighth of a percent is negligible, and you can actually do better simply by adding a sum of money to your payment each month, allocating it to principal curtailment. you said "no fee" but bear in mind that there are recording fees, title fees, etc. so you really won't get away without fees (unless they're absorbing them into your rate, which makes this an even worse deal).
simply prepay your loan and you'll drop the effective rate of interest in so doing.
simply prepay your loan and you'll drop the effective rate of interest in so doing.
our interesrt rate is 5.8% 30 yr fixed. payment 1300. we have sent 1600 each payment. we have made 24 payments so far. should i refi to a 4.8% 30 yr fixed for $2500 or should i just keep doing what im doing. curiously wondering
refi or not
Hi terry,
It is better to refinance a property if it helps you in lowering your interest rate by 2%. Moreover, you should refinance the loan only if you plan to stay in the property for the next 7-8 years. This will help you in offsetting the closing costs that you pay while refinancing the loan. Moreover, you should first check out whether or not you would be able to afford the extra payments that you will have to pay after you refinance the loan.
Take care.
It is better to refinance a property if it helps you in lowering your interest rate by 2%. Moreover, you should refinance the loan only if you plan to stay in the property for the next 7-8 years. This will help you in offsetting the closing costs that you pay while refinancing the loan. Moreover, you should first check out whether or not you would be able to afford the extra payments that you will have to pay after you refinance the loan.
Take care.
I have 19 years left on my mortgage and I was thinking of going to a 15 year mortgage, but I was wondering if I could pay off faster by just adding to the principle every month and using the money that would have gone towards the closing cost and putting that on the loan, bcz the lender is making me take out a loan of 56,000 and I only owe 55000 and the closing is close to 2000.
you are definitely better off simply making payments direct to principal as part of your monthly payment habit. you can cut a substantial amount of interest in so doing, without the need to spend the money for a new closing, as you posited.
confuse, do not refinance. It makes no sense whatsoever to refinance to lower a rate by .125%.
First of all you should know what is refinance?? It gives you the chance to replace your current mortgage with a new loan having favourable rate and terms that you can afford to manage. The new loan is offered against the same property as the collateral and may or may not exceed the current loan balance.
Should you refinance?
Check out some reasons as to why you may take such a decision.
1.You want to save more
2.You want to pay down your mortgage quickly
3.You need extra cash to pay off credit cards
4.You wish to consolidate 2 loans into one
Should you refinance?
Check out some reasons as to why you may take such a decision.
1.You want to save more
2.You want to pay down your mortgage quickly
3.You need extra cash to pay off credit cards
4.You wish to consolidate 2 loans into one
i thought the peanut gallery was gone with howdy's demise.
We're 3.5 years into a 30-year fixed at 6.5%. We owe around $540,000. Thanks to depreciation, our townhouse is worth $572,000 today. Does it make any sense to put in an extra $80,000+ immediately so we have 20% equity and refinance at 4.9-5.0%? We plan to be in the home 5-8 more years.