Profile picture for kmulcahey

2 mortgages - refinance?

Hello,

I have 2 30 year fixed rate mortgages. One for approx. $280k at 61/8% and one for $50k at 71/4. We bought in 2006 and have been paying double on the 2nd to pay down principal. We would like to move in to a bigger house but of course are afraid we are going to lose like $50k at least on the current home. Do we take a chance and hope for a turnaround on the next house while taking the hit on the current?

If we decide to stay, should we refinance? How do we know when the best time to do it is? and what are the gotchas we should look for? Thanks.

Kevin
  • December 17 2008 - Framingham
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Answers (5)

Profile picture for AGCGartner
First check with these people first:
Direct lender, no broker fees:
[deleted by Zillow moderator. Please see our Good Neighhbor Policy for posting guidelines]
Amanda
  • December 19 2008
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Let's look at what you took out without taking into account the extra payments you've been making.

With $280k at 6 1/8% and one for $50k at 7 1/4%, in effect you borrowed $330k at a blended rate of 6.3%.

Taking into account an assumed remaining combined balance of $308k, and assuming you roll closing costs into the new loan (let's say $3500), you r new loan will be $311,500. Let's say you can get 5.0% on a 30 year fixed - by refinancing, you will save $370/mo and $72k in interest over the life of the loan. 

If you want to pay it off in 25 years, you'll save $222/mo and $128k in interest over the life of the loan.

If you want to pay it off in 20 years, you'll pay an extra $13/mo but save $181k in interest over the life of the loan.

I guess the question now is - what are you waiting for?
  • December 22 2008
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Profile picture for ncoughlin
Hi,
It really depends on weather or not your qualify for HARP or Relief Plus. Based off the age of your house, you should, but, there are other factors, like credit, income and assets that may influence the approval.
Please email me[deleted by Zillow moderator. Please see our Good Neighhbor Policy for posting guidelines] and I can review your scenario with you directly.
Best regards,
Noah
  • April 15 2013
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Noah, check the date when the post was made, this one goes back to 2008. FYI, when you put your email address or phone number in a post the moderators will come behind you and remove it. 
  • April 15 2013
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Profile picture for The Mortgage Mark
Why are people replying to posts from almost 5 years ago?
  • April 15 2013
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