When the money runs out, demand a bailout and force the bank to write down your loan, as you would then be a “victim.”
get them to lower the closing costs a bit and go for it!
Find an option with no upfront costs, and see how it washes out. Your current mortgage holder should be willing to do a low-doc refi, since they already have most of the documentation. It’ll raise the rate somewhat, but you won’t have any sunk costs to recoup. This is all assuming you have at least 20% equity in the property, by a current evaluation.
Usually the Fed does not get involved in Mortgage rates but I read somewhere that the Fed as a last resort may move to get Mortgage rates down to 4.00
You may want to do some research on that.
I would wait, they will be paying us to borrow money soon.
If you’ve done the math, the numbers should speak for themselves.
The only variable is that mortgage rates MIGHT drop a bit more down the road.
I think I’d wait. I believe rates will go lower and they’ll be begging people to rewrite loans for a fee.
I’m in the same situation as you and am seriously contemplating a refi. My area was hard hit by the housing bubble and home prices have just returned to a reasonable level, so my house is at a fair price and money is cheap (if you can get it). I was told, however, that the rule of thumb is get a loan that’s 2 points lower than what you have now, which for you and I would be 3.75%.....?
Refinance at a lower rate for 10 years.
Set up a small cash reserve in a savings account. Place the extra cash-out into an Indexed Universal Life Insurance program making a non-taxable gain of about 8.27% with a 167 year old insurance company with 1.,59-1 asset to piolicy ratio.
In about 11 years, you'll have twice as much money and from the beginning you'll have a death benefit and can take out the surrender value anythime you want.
Equity has no loan-to-value, it's not very liquid, hard to take out when you need it (unemployed, injured, or elderly).
In short, you'd be paying about 4% for the money after the tax deduction and making about 8%. You will have set up your own personal arbitrage. You will enhance your retirement and you will own your own bank.
Honestly, two things jump out at me. First, the closing costs sound high. Second, be very certain you will maintain the discipline to keep paying the amount you are paying on your current mortgage or else all you are doing is extending the life of your loan and will end up paying more in interest.
We have a small mtg. we took out to put an addition on. It’s about 40,000 and the rate is close to 5.1 for a 15 year. I happened to be talking to my bank yesterday and asked if they thought rates were going to go low enough for it to be worth it to refinance. She quoted me a rate similar to yours, but with no closing costs. They are a reputable 5 star bank, so you might want to take a look at their rates: http://www.thirdfederal.com/. BTW, she said, wait, we might see rates even lower.
I’d negotiate with them over the closing costs.
If they could refi to 4.5% with no cc I’d go for it-
assuming the loan you have and will get has NO prepayment penalty. Get a number at the bank to call to check on the rates daily and a way to lock in and keep shopping around.
And get even more gazelle intense about paying off your mortgage. It sounds very do-able.
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!
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?
You neglected to report the current value. No advice can be valid unless that is known.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus