Posted on: 05th Jul, 2012 03:51 pm
i am thinking of selling my house in the next 12 to 18 months (if it sells of course) i have a mortgage that i owe 143k finance rate is 6.875 but no mortgage insurance.....i have excellent credit and i have been paying for 5 years on my 30 year mortgage....i was considering refinancing to a 15 year at about 3.5% (without mortgage insurance) because rates are so low my house tax appraisal is 157k which put me on a conventional morgage around 3.5% but rolling about 3k into the loan for closing....my question is will i recoup that 3k in 12 to 18 months on the lower interest? if i will not then i do not want to refinance.....if i just break even i may still refinance because the house may take longer to sell but i do not intend to put it on the market for at least 10 months...
Generally if you are lowering a term then your payments would most likely go up. To figure the break even, take the amount of decrease in your principal and interest payment, and then take your total out of pocket expenses to close the loan. Example, save $75 total cost is 3k - 3k/75 is 40 months to recover...If you are thinking of selling, then you may want to look at all the factors before you decide. If you refinance, your balance will most likely go up. Meaning you may not have enough to cover compensation for the listing and selling agents when you decide to sell
Hello Crystal,
The criteria lenders use helps them evaluate and determine the applicant's best match in terms of available loan programs and associated mortgage rates.
:idea:
The criteria lenders use helps them evaluate and determine the applicant's best match in terms of available loan programs and associated mortgage rates.
:idea:
You might want to compare the two alternatives on an equivalent basis. I'm guessing that your original mortgage was $152,000 which would yield a balance around $142,887 after 60 months. If accurate, that means your P&I payment is $998.53. You can run with the exact figures since you know them or have your loan officer run them for you. Should take LO around 30 seconds so I'd go that route.
If you finance the balance plus closing costs, the amount refinanced would be approximately $145,887 with a P&I of $1,042.92 at 3.50%. Use the new 15-year P&I to amortize the existing loan and see where you'd be in your estimated time to sell.
At 12 months the existing balance would be $140,109 versus $138,358 for the 15-year - a spread of $1,751. At 18 months, the numbers are $138,647 for the existing and $134,494 for the new 15-year for $4,153 difference.
I'd seriously consider the refinance but check other sources for comparison rates. 3.50% seems to be about one-half percentage point to high but rates vary by locale and/or there could be other factors in your situation affecting LLPAs.
If you finance the balance plus closing costs, the amount refinanced would be approximately $145,887 with a P&I of $1,042.92 at 3.50%. Use the new 15-year P&I to amortize the existing loan and see where you'd be in your estimated time to sell.
At 12 months the existing balance would be $140,109 versus $138,358 for the 15-year - a spread of $1,751. At 18 months, the numbers are $138,647 for the existing and $134,494 for the new 15-year for $4,153 difference.
I'd seriously consider the refinance but check other sources for comparison rates. 3.50% seems to be about one-half percentage point to high but rates vary by locale and/or there could be other factors in your situation affecting LLPAs.