Mortgage Refinancing - A good idea?

Question

Hello,
We have lived in a 197K home for 21/2 yrs on a 5yr.ARM loan (rate 5.625%; 192K left). The house is valued at 216K now and I am just shopping to get a 'fixed' rate. While most offers (via lowermybills.com) included a heavy premium payment, my current lender offered a no closing cost 2 loan option (172K @5.87% and 21k@ 7.5%) which does not reduce my monthly payment at all but there are no 'other fees'. That is for about $200.00 I could have the anxiety of having an ARM off of me!

I guess the closing costs, pre-paids, settlement charges etc are included in the 2nd mortgage and I was urged to pay it off ASAP to reduce the monthly payment significantly!

The Question is- IS this worth it?

Thanks

-Sm

Answer 1

Simply put although your fear of the adjustable rate is valid let me put this in perspective for you. Niether of these deals are going to save you money. Most likely because you will be looking for a lower payment you will be looking to refinance in another 2 1/2 years anyway. No bank does anything for free, so your current mortgage company mostlikely has something in their package to perserve their intrest i.e. pree-payment penalty or something of the sort. I would suggest you sit tight. You still have time and if you are not going to clearly better your situation now there is no need to make a move.

Answer 2

What is the APR on these notes? It may look good on the surface but the rates have been fairly stable. Ask for a copy of the TIL and see what the APR is. When looking at this you will not have any MI. So if the apr is not greater than 6.125 on the first then yes it is a good idea since Mi is not tax deductible
I am a loan officer in TN

Answer 3

in case you have a extreme sufficient credit and your debt to earnings ratio isn't worrisome, it would desire to no longer impression you, in spite of the undeniable fact that i'd propose you to attend. besides on your earnings, those are the main severe issues that a financial company takes into attention while finding at your eligibility for a private loan. At this factor, they're finding even closer at that debt to earnings ratio than they're credit scores! you have an incredible credit status, yet while your debt to earnings ratio is extreme you won't be eligible for refinancing. And undergo in innovations that in case you get a sparkling credit card with say a $5000 shrink on it, the banks will look on that as a $5000 debt in spite of the undeniable fact that it has a nil stability because of the fact at any given 2d, you will desire to pass into $5000 debt on that card. in case you will practice for the cardboard, tell them you desire a foul credit report shrink on the cardboard - a minimum of till you get your refi executed. while you're in any respect in threat of no longer having the ability to qualify for the refi, wait till when you have closed on the deepest loan.

Answer 4

if your going to stay in the home for another 5, do it and buy down the rate a little

Answer 5

It could be a good thing but we would have to analize youre circumstances to see what would benefit you more if you would like to know more you can contact me at [e-mail]