We bought our house 1 year ago & have been paying interest only. Comps have finally gone up and if we refi to a standard 30yr does that year of int we paid already help us at all?
2007-09-18 13:06:25 · 5 answers · asked by Danny B 1 in Business & Finance ➔ Renting & Real Estate
no.....remember the only way to get equity is to pay the PRINCIPAL...your balance should be the same.
If you refinance then you can expect a larger payment because you will need to start paying the principal
2007-09-18 13:18:38 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It helps you on your tax return at the end of the year, but that's about all.
When you refinance, you're actually taking out a brand new loan and paying closing costs to go along with it. The average interest rates right now are about 6.75%, but can be as low as 5.25% depending on certain factors. If your current interest only rate is equal to or less than 6.75%, you may want to consider making a higher monthly payment on your interest only loan so that you can pay down the principal. All banks allow this.
For instance, if your payment is $1000 a month, send $1200 a month and you'll begin to pay down your principal and you'll notice that your minimum interest only payment will start to go down as well because the balance is decreasing... not much, but over time it will.
the bottom line is that you need an expert to do a total cost analysis for you to show you if refinancing is really your best option. There are lots of factors besides payment and rate. I specialize in this type of analysis so if you have any further questions, you're more than welcome to contact me.
2007-09-18 14:02:55 · answer #2 · answered by The Smart One 4 · 0⤊ 0⤋
not sufficient coaching to truly answer that. in case you determine to refi regardless of the undeniable fact that, don't get AN ARM. fixed fee, as we talk own loan in common terms. that's a threat to pay that off interior the subsequent 12 months in case you do stay under your skill and end including to it. survive one million/3 of your verify, be conscious something to the debt. positioned approximately 10% aside for emergencies and retirement.
2016-12-17 04:43:46 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Making your payment on time will improve or at least maintain your credit. Interest only means interest only so there will be no reduction in the amount that is owed on the property.
2007-09-18 13:25:06 · answer #4 · answered by Traveler 7 · 0⤊ 0⤋
Its interest....you cant get credit for it twice.......
2007-09-18 16:00:02 · answer #5 · answered by DennistheMenace 7 · 0⤊ 0⤋