I have purchased a home and considering refinancing because my monthly payment seems quite high as a result of the short mortgage term. I put 20% down and have roomates living with me to help pay my mortgage. I was told that by paying off real estate as fast as possible is the quickest way to build wealth and equity. I would like to have some more spending money if I can as well as still continuing to build equity in my home.
2007-04-19 09:14:52 · 8 answers · asked by Patrick28 1 in Business & Finance ➔ Renting & Real Estate
It's a question of what you will do with the difference in the lowered payment, and the difference in interest rates.
You don't need an attorney to explain mortgages, and you don't need a mortgage counselor to talk about loan programs.
You have your house, and apparently can afford the payments. You don't HAVE to change anything. You might want to, but that's not a function of what loans are available, at least not at this point.
What you need is an INVESTMENT counselor.
A competent investment counselor can help you get a good picture of where you are and where you want to be, and only THEN can you know how good a loan needs to be to justify a change.
I'd suggest finding someone nearby that's competent that you feel comfortable with, but you don't need a loan officer or an attorney just yet.
2007-04-19 09:37:13 · answer #1 · answered by open4one 7 · 0⤊ 0⤋
Depends on what you qualify for, and how long you plan on keeping this loan. If you put 20% down, then you have plenty of equity for the refi. You'd have to show rental agreements for the roomates, as well as probably cancelled checks for about a year to show it as income, and lower your debt ratio, if that's a concern. If you agreed to a shorter term than 30 years, say 20 or 15, refinancing to a 30 would increase your cash flow, especially since you don't have to tell your roomates you're refinancing. If you qualify for conforming, the 3 year fixed adjustable rate mortgage carries a slight rate advantage over the 30 year fixed product, so if you plan on keeping the house a while, the 30-fix would be a less stressful product, especially since the payment adjustments tend to sneak up on the borrowers.
2007-04-19 09:29:37 · answer #2 · answered by togashiyokuni2001 6 · 0⤊ 0⤋
I have 20 years experience in the mortgage industry/investor. RE market will always go up and down, however, statistics prove long term - re values will increase. consider making only the necessary mortgage payment monthly and perhaps one extra payment per year which will reduce a thirty year mortgage to about 22 years. Use extra spending money to purchase your next property or investment. You already have equity in your property. Is the spending money to purchase luxury items? If you have credit card debt - it's best to pay it off as the payments are primarly interest, not prinicipal. Have you a set goal for where you want to be financially in one year - five years?
2007-04-19 13:55:16 · answer #3 · answered by garyengel_1 1 · 0⤊ 0⤋
There are too many variables for a quick answer. Mortgage interest is deductable, but if your income is low and you have to claim the rents from your room mates it may not help you much. If your intent is to sell the house in a few years for a profit, you might want a loan that is fixed for a few years and then goes to adjustable. If you plan on staying put, don't get one of those. Also don't forget it's not free to refinance. Depending on your credit it could be very expensive. They will add it into the loan, but you will have lost some of your equity.
2007-04-19 09:33:57 · answer #4 · answered by tidww 2 · 0⤊ 0⤋
There are many ways options to consider. I would suggest refinancing with the optimum goal of a lower payment and setting up bi-weekly payments with your mortgage company. Bi-weekly payments can take years off of a loan and even cut the life of the loan in half if you apply your savings as well. I am a loan advisor, different from a broker or officer, because my goal it not just to achieve your goals but educate you along the way. Feel free to contact me, I would love to explore some options with you. I can be reached at 1-800-585-9005 ext. 1211 or by email broberts@surpoint.com. Check out our website as well www.surepoint.com Good Luck
2007-04-19 14:19:24 · answer #5 · answered by Brittiny R 1 · 0⤊ 0⤋
Rather than a short term loan you may wish to consider doing a loan that is fixed for 3 to 5 years at a lower interst rate and paying extra towards your mortgage as any extra is applied against yourprincipal balance.
2007-04-19 09:21:24 · answer #6 · answered by mazziatplay 5 · 0⤊ 1⤋
I don't think you should entirely believe that you should pay down your real estate loans as fast as possible. You get a very good tax credit everyyear if you are a home owner. you should read up on some of the articles here:
http://www.mymortgagebroker.com/articles/index.php
The more you know.....
2007-04-19 12:42:21 · answer #7 · answered by viralcraig 2 · 0⤊ 0⤋
https://www.lendingleaders.com/fanniemae.cfm?https://loans.countrywide.com/FTLP/WHNew/default.aspx?
2007-04-19 09:26:54 · answer #8 · answered by Brite Tiger 6 · 0⤊ 0⤋