Posted on 12/17/2008 12:05:24 PM PST by brownsfan
“You have very healthy equity in the property. Is it in a market with heavy downside pressure on resale value of late, moderate declines, or reasonably stable? If you’re in a former bubble area, I’ve heard of 30% equity required for refi, on a current appraisal.”
I think we’re still losing value here due to the economy, and the lack of jobs in the area. But what I’m losing is pennies compared to other areas. It’s an older 2100 sq ft home in an established area. I’d say we’re pretty stable here as far as real estate values. I can’t see the home losing much more than another $5k-$10k in value.
Thanks for the info. That's basically what the banker said, she said to refinance for that small amount the rates would need to go down a good deal more in order to make it worthwhile..
Wait until O gets in office. The recent Fed move and the Dem stimulus package will lower 30 year rates to 4.5%. Then refinance and take out as much equity as you can and park it somewhere safe, like gold, food, and guns.
After O and Pelosi are through with their ‘stimulus’ measures, the economy will be wrecked for good.
BTW, I am only half joking. I am about the same age as you and have 250k equity in my house, have a 4.875% 15 yr mortgage with 8 years left. If rates get down to 4.5% for 30 years, I will pull as much equity out as possible. My house payment at 325k mortgage would be about what my current 15 yr mortgage payment is, and the tax reduction combined with return I can get make it a no brainer. Good luck!
I will take it as long as the corporate jets are not sold and that all executives get an immediate 200% bonus no matter how badly the stock does...
Let’s see, I owe $120k and the house is worth $380k according to the government and 320K according to the bank. Walkalloverya is offering 4.875 with no points for a 15 yr note here.
Well, then, provided that your debt to income, assets and employment history are all good, I don’t see any reason why you wouldn’t get the best rate out there. Another poster mentioned the Fed, and they did make a peculiar statement about drivng down mortgage rates. How long is the lock-in for this one, and does the lender charge for it? Do they have a “float down,” meaning that you can get a better rate, if it’s better than the locked rate? All of this would play into any decision, if you’re not dead certain that it’s the best thing to do right now.
Agree on the ROR vs LTV. I also would suggest, however, that “new” money going to Old Mutual will earn nothing near 8.25%. Those 5, 10 and 25 year average return numbers are next to meaningless unless you have had your money in for the stated term or longer.
None at all. It's just a hunch based on what I see.
In order to get the tax break you have to pay in monthly or if you have a lump sum, over a five year period. They put the money in a side fund and move it across each year if you have a lump sum.
I gave you the average for the last 25 years. If you take the money starting the 11th year you will have the 8.27 minus about 1% fees. If you start a fund for a grandchild and they use it for their retirement 65 years later, they'll do very nicely thank you.
A person refinancing will come out ahead of their interest payment if they put some in an IUL and they'll have a death benefit.
4.875 % is too high. Wait till it drops to .04875 % I’m sure the Fed will accomodate you eventually. Then you can save real money!
What would your savings (interest) on a 15-year mortgage be?
Makes sense.
You neglected to report the current value. No advice can be valid unless that is known.
“You neglected to report the current value. No advice can be valid unless that is known.”
Somewhere along the way I reported conservatively 90k in equity. I paid $192k for it four years ago. A couple houses near me have sold in the last year, my best guesstimate of value is $200k. (I’ve put over $30k into it).
WE have a winner here. Good thought. AND this guy can afford to wait. If it goes to 4% then do it. Who knows. But also realize that property values are dropping. Actually I would go back to the lending institution and see if you can bargan with them. Closing costs should be less. And don’t let them B.S you with fees. Banks NEED good borrowers. And you have a track record. You have a good loan so threaten them to take it else where if they do not bargin. Move up the food chain till you fine someone who can talk and chew gum. Look for a V.P.
Great, that eliminates the possibility of the lender requiring you to pay for mortgage insurance. There is no need to re-finance in a rush.
Do you have any high interest rate credit card or other debt? You sound disciplined enough to borrow only what is required to pay the amount owned on the older loan. However, you can borrow a bit more, don’t get carried away, and pay off other debts but you will be paying interest on the amount for the duration of the new loan. You can refinance for 30 years and still pay it off at a faster rate. Make sure any new loan is assumable should you find the need to sell.
I am in the same boat. I called my current mortgage company last night and was offered a rate of 4.875 with an APR of 5.22. Today, I see on their website that the rate has dropped again.
I will be combining a primary mortgage with a balance on a home-equity line of credit. The HELOC rate is currently very low, but I am nervous and would rather lock it in at a fixed rate than gamble.
I plan to watch the rates until the disclosure forms arrive, and then decide whether to sign or haggle for a better rate.
“I would go with a no-doc, adjustable, sub prime loan at 125% of the value of the house. Spend all the money on vacations, SUVs, wine and hookers.
When the money runs out, demand a bailout and force the bank to write down your loan, as you would then be a “victim.””
Idiot, you forgot the cash-out.
Fannie Mae,
Freddie Mac,
Citigroup, Lehman Brothers,
Bear Stearns.
Note: Your new job starts tomorrow at noon. Your pay will be 1.5 million dollars a year unless you are fired the next day and at that point you will receive a 30 million dollar severance package
You must be one of them, A Message - you're too close to the truth.
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