Should I Refinance My Mortgage

Question: Should i refinance my mortgage?

(Posted by: ANDRU V on 2008-01-24 14:23:01)

I currently have a 30 year fixed mortgage that has been paid for the last 15 years. I have only 50k left and my current fixed APR is 7.125 %. How much would I save if I were to refinance my mortgage to the current rate. My credit score is around 800. Is it worthwhile?

Posted by: DirectLendingPlanet on 2008-01-24, 14:29:57

NO do not refinance your home your on the home streach and now most of your payment is going to the principle! the saving you would get would be minimal. if you refinance now your starting to pay all over again and i would never wdvise refinancing this far into the mortgage. if you would refinance you would be paying for the first 10 years mostly interest and it would cost you much more in the long run be happy with what you have!

Posted by: financing_loans on 2008-01-24, 14:30:59

Its going to be hard for a lender to make money on a 50K loan. So you will most likely fork all the costs. I ran the numbers. I dont see any way you make money to refinance. If you were going to refinance I would go to a bank or local credit union and say I want a no fee second. They give give you a 50K loan. They pay for everything. Wont cast you a penny. They give you a second mortage. Use that mortgage to pay off your first mortgage. Now that is your first mortgage and it didnt cost you a penny. Thats my suggestion

Posted by: poolman4u03 on 2008-01-24, 14:32:50

In your position you have to look at what you will be saving, as compared to the fees you will have to pay. At this point you will only shave 1-1.5% off of your rate. If you decide to do this look at adjusting the years to a 15 year and you will see the payment increase will be nominal, and the rate would be less than a 30 year.

Posted by: Dawn F on 2008-01-24, 14:44:51

The answer to "is it worthwhile " is--IT DEPENDS. Since the Federal Reserve has been cutting interest rates lately, you might be able to get a better interest rate. Check with your financial institution/ mortgage company. They won't charge you anything to find out if you can get a lower interest rate, and if you decide to go ahead with it, you can probaby roll any charges into your mortgage. I would think that 2 points lower could do you some good. There are mortgage calculators online to help figure payments out, but don't forget to include escrow amounts--taxes, insurance and anything else. What I would NOT do (generally speaking) is "cash out " on your "equity ". That is to say, don't refinance your original mortgage rate for another 30 years in order to get "cash out " of the "equity " of your home. (ALL "equity " is, is the difference on what you owe on your house and what you can sell it for--usually in 30-60 days. The way we've all been taught to think about "equity " is so bogus, and it irritates me that people buy into it!) There are, in all honesty, a few times that this is a good idea, but it's a VERY FEW. Usually, only very saavy real estate investors do this, they do it well, and they make a lot of money doing it. But this is NOT something for the average person, and DEFINITELY NOT to pay off bills/ debts. ALSO, if you decide to refinance, go for the 15 years mortgage. Even with that, if you get a lower interest rate your payments should be lower. But I would ONLY refinance on the 15 year FIXED RATE mortgage if it WILL lower your payments. That's my 2-cents worth. Dawn