Posted on 12/17/2008 12:05:24 PM PST by brownsfan
I have a home with a 30 year loan, I owe about 93k on it. At the current rate I'm paying it, I'll have it paid off in slightly over 12 years. My current rate is 5.75.
I called about a refinance. 4.875 with $2300 in closing costs. This would drop my payment about $150/month. So, if I kept paying at the same payment I pay now, I'd pay the new loan off in slightly less than 12 years and save about $8k in interest payments over the life of the loan.
I don't plan on moving. I'm 51. I can't see any reason I shouldn't do this, but I thought I'd get some input here. Thanks.
When the money runs out, demand a bailout and force the bank to write down your loan, as you would then be a “victim.”
get them to lower the closing costs a bit and go for it!
I agree. But I’d go with Corvettes instead of SUVs.
Just one man’s opinion, mind you...
;^)
Find an option with no upfront costs, and see how it washes out. Your current mortgage holder should be willing to do a low-doc refi, since they already have most of the documentation. It’ll raise the rate somewhat, but you won’t have any sunk costs to recoup. This is all assuming you have at least 20% equity in the property, by a current evaluation.
Usually the Fed does not get involved in Mortgage rates but I read somewhere that the Fed as a last resort may move to get Mortgage rates down to 4.00
You may want to do some research on that.
“I would go with a no-doc, adjustable, sub prime loan at 125% of the value of the house. Spend all the money on vacations, SUVs, wine and hookers.
When the money runs out, demand a bailout and force the bank to write down your loan, as you would then be a “victim.” “
Those loans are a little tougher to come up with these days. Besides, don’t you have to be a Democrat to qualify?
I would wait, they will be paying us to borrow money soon.
If you’ve done the math, the numbers should speak for themselves.
The only variable is that mortgage rates MIGHT drop a bit more down the road.
I think I’d wait. I believe rates will go lower and they’ll be begging people to rewrite loans for a fee.
I’m in the same situation as you and am seriously contemplating a refi. My area was hard hit by the housing bubble and home prices have just returned to a reasonable level, so my house is at a fair price and money is cheap (if you can get it). I was told, however, that the rule of thumb is get a loan that’s 2 points lower than what you have now, which for you and I would be 3.75%.....?
Refinance at a lower rate for 10 years.
Why not keep the loan you have pay 13 payments instead of 12 a year and be done with it in about 6 years?
Set up a small cash reserve in a savings account. Place the extra cash-out into an Indexed Universal Life Insurance program making a non-taxable gain of about 8.27% with a 167 year old insurance company with 1.,59-1 asset to piolicy ratio.
In about 11 years, you'll have twice as much money and from the beginning you'll have a death benefit and can take out the surrender value anythime you want.
Equity has no loan-to-value, it's not very liquid, hard to take out when you need it (unemployed, injured, or elderly).
In short, you'd be paying about 4% for the money after the tax deduction and making about 8%. You will have set up your own personal arbitrage. You will enhance your retirement and you will own your own bank.
“Find an option with no upfront costs, and see how it washes out. Your current mortgage holder should be willing to do a low-doc refi, since they already have most of the documentation. It’ll raise the rate somewhat, but you won’t have any sunk costs to recoup. This is all assuming you have at least 20% equity in the property, by a current evaluation.”
I talked with the current lender. They have my payment history and all docs. The loan agent didn’t seem to be in a hurry to sell a loan, nor negotiate. I told him the costs bothered me and I’d shop around, he seemed to not be concerned.
Conservatively I have $90k equity in the home, probably a bit more. I bought it for $192k four years ago, and have put over $30k in it.
Honestly, two things jump out at me. First, the closing costs sound high. Second, be very certain you will maintain the discipline to keep paying the amount you are paying on your current mortgage or else all you are doing is extending the life of your loan and will end up paying more in interest.
“get them to lower the closing costs a bit and go for it!”
How much give would you guess there is? $500?
Do you think offering to refi 4.875 with $1800 closing would fly?
We have a small mtg. we took out to put an addition on. It’s about 40,000 and the rate is close to 5.1 for a 15 year. I happened to be talking to my bank yesterday and asked if they thought rates were going to go low enough for it to be worth it to refinance. She quoted me a rate similar to yours, but with no closing costs. They are a reputable 5 star bank, so you might want to take a look at their rates: http://www.thirdfederal.com/. BTW, she said, wait, we might see rates even lower.
That’s just about exactly what i was thinking.
You might even START at 1300-1500 and “give in” up to 1800
I think that was when people were moving every 3-5 years. The 2-point drop would be what it would take to the reduce the payment enough to cover the costs of re-financing.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.