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Started By
Message
Refinance?
Posted on 12/26/11 at 10:47 am
Posted on 12/26/11 at 10:47 am
Bought my home a little less than 3 years ago and got a 5.44% interest rate, much of it due to the first time homebuyer program i was in. I have extremely good credit and have wondered if i should attempt to refi due to the rates hovering around 4%. I have around $9,000 in equity built up so far, but do not have much savings to put towards refinance closing costs. I know many refis allow you to roll costs into the refinance and even some allow you to pull some cash back into your pocket. Would this be a smart move at this point to do or would i be better off staying with current mortgage if i see myself getting out of the house within the next 5 years or less?
5
Posted on 12/26/11 at 11:50 am to tigermannola83
With only $9,000 in equity, you'll almost certainly have to pay mortgage insurance (PMI), likely for as long as you'll be in the house if you plan on being out in 5 years.
What's the house worth? After closing costs and PMI it will likey not save you any money, and possibly actually cost you more money than you're currently spending. You may check with your bank and see if they will help you out for cheaper/no closing costs. Still may cost alot in PMI, but it's always worth looking into.
What's the house worth? After closing costs and PMI it will likey not save you any money, and possibly actually cost you more money than you're currently spending. You may check with your bank and see if they will help you out for cheaper/no closing costs. Still may cost alot in PMI, but it's always worth looking into.
Posted on 12/26/11 at 12:36 pm to tigermannola83
If you bought in at 5.44 % interest, obviously you were comfortable enough at that time with your decision.
I wouldn't deplete my savings account to refinance to 4 %.
Keep your savings, but throw as much as you can afford to the principal each month.
If rates hold and your savings increases, then perhaps you can look at refinancing later down the line.
I wouldn't deplete my savings account to refinance to 4 %.
Keep your savings, but throw as much as you can afford to the principal each month.
If rates hold and your savings increases, then perhaps you can look at refinancing later down the line.
Posted on 12/26/11 at 3:04 pm to tigermannola83
quote:
tigermannola83
What type of loan do you have now? FHA, VA, Conv?
You can roll closing cost into the new loan. Yes you will have PMI, but you probably have it now as well.
Would you be comfortable paying a couple hundred more per month to go with a 15 yr?
Posted on 12/26/11 at 3:07 pm to tigermannola83
If you are going to move out in five years it may not be worth it, depending on the exact numbers. But if you decide to keep it for the long haul (investment property, perhaps?) then get a 30 year. 4% (less than that with the tax deduction) is stupid cheap, stretch that out as long as you can.
Posted on 12/26/11 at 3:26 pm to tigermannola83
If you see yourself getting out in 5 years, I'd do a 5 year ARM. The rate is 2.9%
You'll save about 4% of the loan value over those 5 years.
You'll save about 4% of the loan value over those 5 years.
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