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Appreciate if you could share your opinions on what are the best refinance Options for my situation...
Loan amount: 250K
ARM is resetting soon.
Should I go in for a higher monthly payment with a 15 yr Fixed, which I can afford with ease now.
Or stay put with the Safer 30 yr Fixed lower monthly payment option and do periodic Extra Principal payments.
I am able to look at the numbers through the calculators available but .. get confused on whether it is good or bad that more money goes into Mortgage Interest or not for my scenario.
I am not a good investor of money...!
With growing kids, we potentially look to move to a bigger home in a few years time..! May or may not sell the current home at that point of time depending on affordability.
So is it wiser that I keep cash liquid looking to the Bigger payments I may occur in a few years time ?
There are a few mortgage professionals that come on this forum, and maybe able to give an approximate idea with quotes on rates/fees. This way you can make an informed decision.
Here are few of the questions that maybe asked.
1. FICO score
2. Loan amount, and approximate appraised value.
3. How many years have you been in the ARM?
4. Have you looked into the 20yr vs 15yr?
5. Will you provide full documentation of your income/assets?
If you have already received quotes, then it would be best to describe them here to help us have a good idea of your current situation.
Excellent credit Score, Home is around 375K. The Price seems to be dropping with every home sale in the neighbourhood though.
If I look into bankrate.com's average national mortgage refinance rates...
For a 250K loan, (no points) ,
30 yr has a lowest rate of 5.625% with a payment of 1439
15 yr has a lowest rate of 4.875% with a payment of 1961
Is there any advantage to ... taking a 30 yar loan and doing extra payments towards principal rather than getting stuck with a 15 year loan for a 1900+ payment.
I understand that these projected rates are lesser than what may actually be given out.
You will soon find out that the lenders at Bankrate will post rates that can't be delivered.
Par rate for the majority of lenders is at 5.5-5.625%. There's no way they're giving this w/out at least 1 point. Same thing applies with the 15yr fixed.
If you took out the 30yr fixed, and paid the extra 522 per month you would have paid 151,585.68 in interest.
With the 15yr fixed it would be 113,227.83 in total interest.
Quote:
Originally Posted by SC_resident
Excellent credit Score, Home is around 375K. The Price seems to be dropping with every home sale in the neighbourhood though.
If I look into bankrate.com's average national mortgage refinance rates...
For a 250K loan, (no points) ,
30 yr has a lowest rate of 5.625% with a payment of 1439
15 yr has a lowest rate of 4.875% with a payment of 1961
Is there any advantage to ... taking a 30 yar loan and doing extra payments towards principal rather than getting stuck with a 15 year loan for a 1900+ payment.
I understand that these projected rates are lesser than what may actually be given out.
Appreciate if you could share your opinions on what are the best refinance Options for my situation...
Loan amount: 250K
ARM is resetting soon.
Should I go in for a higher monthly payment with a 15 yr Fixed, which I can afford with ease now.
Or stay put with the Safer 30 yr Fixed lower monthly payment option and do periodic Extra Principal payments.
I am able to look at the numbers through the calculators available but .. get confused on whether it is good or bad that more money goes into Mortgage Interest or not for my scenario.
I am not a good investor of money...!
With growing kids, we potentially look to move to a bigger home in a few years time..! May or may not sell the current home at that point of time depending on affordability.
So is it wiser that I keep cash liquid looking to the Bigger payments I may occur in a few years time ?
Bolded for emphasis. Are you really likely to outgrow your current home? How old are you kids? If you are likely to make a move in a year or two then you may spend more on the refinance and it won't be worth it... because you may be selling the house anyway. Sit down and figure out where you are headed.
Once you set some life goals, we can talk mortgage. Like renriq02 said, the rates you saw are baloney. Without a point or origination fee (point by another name) you won't see such rates because neither the bank nor the loan officers work for free and the rate listed is par rate. I saw this today with my own eyes on all of my rate sheets.
The 30 year fixed conforming is in a wonderful position right now of being very cheap. If I was in your shoes and had the same doubts as you I would refinance into a 30 year fixed, take the lower monthly payments than the 15 year fixed requires, save up some money, invest it, etc, and take the time to figure out where you're going with your kids. Heck, take the difference between a 30 year fixed and the 15 year fixed payments and throw them into your kids' college fund.
Mm.. Well that definitely seems the logical way to go...
We are on a 5 year Balloon mortgage (mistakenly mentioned as an ARM before).... currently the 5th year has just kicked in. We still have 3/4 of the year to go before we have to pay up.
We had hoped to sell and move out of this Condo before this 5 year term. But with the Stagnant and Lowering House Sales in our area, we cannot sell and make enough profit to purchase our "desired single family home " in the "desirable neighbourhood'.
Yes we may end up moving in another 3 to 4 years, but not Right now.. !
So I guess ... with so many uncertainities..... taking out a 30 year loan + lower monthly payment might be best and safe bet to do.
Atleast that way... in case we rent it out when we move out of here.. we can be sure the Rent would cover the mortgage expenses.
Mm.. Well that definitely seems the logical way to go...
We are on a 5 year Balloon mortgage (mistakenly mentioned as an ARM before).... currently the 5th year has just kicked in. We still have 3/4 of the year to go before we have to pay up.
We had hoped to sell and move out of this Condo before this 5 year term. But with the Stagnant and Lowering House Sales in our area, we cannot sell and make enough profit to purchase our "desired single family home " in the "desirable neighbourhood'.
Yes we may end up moving in another 3 to 4 years, but not Right now.. !
So I guess ... with so many uncertainities..... taking out a 30 year loan + lower monthly payment might be best and safe bet to do.
Atleast that way... in case we rent it out when we move out of here.. we can be sure the Rent would cover the mortgage expenses.
I fully sympathize. You are like many of my customers. The good thing seems to be is that you still have options.
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