Explain to me the what the benefits are to REFI - I am just not getting it.
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Anonymous
| New PP here, is there a benefit to an ARM in this situation since OP only plans to be in the house another 6 years or so? |
Anonymous
| You can set the time frame at whatever you want, you aren't required to do 30 years. We used to just match whatever we had left on a 30 year. So in your case you would do a 22 year. Most recently we did a 15 year. You will get better rates if you can swing a 15 year, and at 6% you can probably do a 15 year for the same or less as your current mortgage. |
Anonymous
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OP find a mortgage broker to help you. I have used Roger Dennis and he has been great.
http://caliberfunding.com/rdennis |
Anonymous
| What kind of closing costs are you looking at to refi -for six years that might make it not worth it. |
Anonymous
If you're paying 6 percent you can most likely refi to a 15 year fixed and both lower your payments and reduce the length of time on your mortgage. a no-brainer. Your husband doesn't know what he's talking about. |
Anonymous
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We refinanced last year w/23 years left on a 30-year fixed. We were paying 5.25%, now 3.something, & we switched to a 15-year fixed. Our payment actually went up slightly ($100/month), but we'll have the house paid off much sooner & over time we'll save more than $100K.
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Anonymous
If refi would lower their payment by $350 a month they will save over $4,000 the first year--should be enough to "pay back" any closing costs. If you refi to a 15-year mortgage and your total payment stays the same or goes up a little you can't do the "pay back closing costs" calculation, but you can look at how much less you'll pay in interest each year and compare that for the first year or two--if you cut your rate from 6% to 3%, you could save $10K+ in interest the first year on a $400K mortgage. |
Anonymous
What we did was still pay whatever we currently pay. As a result with each refi, we have done two, we keep our original payment amount. Now our payment is 2/3 principle and we will shave several years off of our original last payment date. My stipulation was that I never wanted to go beyond that first loan end date, I didn't like restarting the countdown clock each time. So, while we don't get any immediate short term monthly "savings" our principle loan amount diminishes faster. |
Anonymous
| Your husband is a moron. |
Anonymous
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Agree with PP! Refi and if you continue with your current payment (or even less) when you move in 6 years your principal will be quite a bit less. If you know you will be gone in 6 years (definitely0 I would do a 7 year ARM and continue your current payements. Not knowing your principal I can assure you it will still save you money or have your pricipal be so much lower when you sell. You really need to use a mortgage calculator to run different scenarios.
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Anonymous
Or just doing his part to support the banking industry. Bankers need to send their kids to college too! |
Anonymous
| New PP. where do you get a 20 year mortgage? Or a 22 year like suggested? |
Anonymous
Anywhere. It's just a custom term. |
Anonymous
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I'm going to try to explain this in laymans terms - the interest you pay every month, whether its a 5 year, 10 year or 30 year mortgage, assume all are at the same rate (4.5% or whatever) will be the SAME. It is basically the same calculation - (unpaid balance that month x interest rate)/12= monthly interest expense
What you are reducing when you refi is the interest you pay to someone else because your rate is reducing. To mitigate your husband's concern, you can get a loan with a shorter term, or decide to pay more principal on your own. |
Anonymous
| Also, if your husband is in charge of any of your other finances, I would get a fee only financial planner. |