kristinjohnson111 asked:
I purchased a townhouse back in 2005 and i have two loans on it one for 490,000 fixed for 10 years at 5.75%, and a smaller loan for 54,000 dollars at a variable rate. Obviously the value of my house has dropped. But i’ve noticed some companies offer refinance rates at about 4.5%. If i put down about 10,000 and try to refinance will i be able to get that 4.5% fixed for 30 i guess. I have perfect credit and have never missed a payment since ive purchased the house. Also is it worth refinancing for 1%.? Thanks
Calvin
I purchased a townhouse back in 2005 and i have two loans on it one for 490,000 fixed for 10 years at 5.75%, and a smaller loan for 54,000 dollars at a variable rate. Obviously the value of my house has dropped. But i’ve noticed some companies offer refinance rates at about 4.5%. If i put down about 10,000 and try to refinance will i be able to get that 4.5% fixed for 30 i guess. I have perfect credit and have never missed a payment since ive purchased the house. Also is it worth refinancing for 1%.? Thanks
Calvin
Tags: Loans, Mortgage Refinancing, Variable Rate
Michele
Oh definitely. Remember that the real cost of the property is the 1st and second mortgage principal loan in addition to the interest being charged. A fixed rate will compel you to pay a value for the property that is above and beyond the true present value.
So let us assume you paid the 490,000 and the 54,000 at an average 11% PA then the when you are done the house values 200,000.00
With the way how property values are going you can refinance the loan, reduce the term from 10 to 9 years still pay the monthly payment and get the lien off your home earlier.
Likewise you can extend the mortgage term and cut your monthly payments in half. However careful thought must be given to this.
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William
I disagree with the guy above…. it’s worth money to refinance if you can but…
I’ll be real with you… regardless where you’re at the value has declined. You probably have an upside down property, right? Banks lend money based on the collateral they have. Who in the right mind will lend more money then what the house is worth, unless you put a huge down payment…. but that’s probably not the case because you probably have an 80/20 loan and you probably put little or no money down. This means no equity… this mean… slim to none.
Wanda
There are a couple of things to consider here.
What it sounds like to me is that you 1st mortgage is a 10 year arm and your second is a HELOC. Depending on how long you plan on staying in your home you may want the security of a 30 year fixed. If you plan on moving in the next 2-5 years it may not make sense.
If you intend on staying it would make sense to refi into a fixed rate just for the stability. The other big question is where you live because you have a jumbo loan which is harder to find financing for.
If you live in a high cost area you may be able to refi into an FHA loan which will allow you to go up to 97% of the value of your home.
The only other issue is what you currently owe on your mortgages. If you are above the conforming loan limit of $417,000 you will not see a rate that low.