Profile picture for gardnr12

24 years left on a 30 year fixed rate mortgage (5.875%) I am 60 years old. What should I do?

I currently pay 1774 a month and add another 300. a month on the principal. By the time I retire in 6 years I hope to be able to sell the house and buy something smaller.

Should I remortgage at 4.489% APR for a 20 year mortgage? The closing costs are about $6000. Is it worth it considering the closing costs? Is there a formula to find this out?



 



 continue paying $1700. a month mortgage. I currently add $300. each month to the principal.  I will have to sell this house when I retire and move to a less expensive house.  

 Keep paying on this mortgage and 

Geta 
  • September 27 2009 - Manassas
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Answers (12)

It all depends on what your financial priorities are now and by the time you retire.  There is no correct answer without a professional doing a cash-flow analysis on you.

If you goal is to chop away at the loan balance so you will have more equity/money in your pocket when you sell, then refinancing may not be a smart thing unless you refinance into a 15 or 20 year mortgage.  Again, you should post a bit more of your situation here, such as:

1.  Income.
2.  Monthly cash-flow.
3.  Your savings inside and outside of any 401k, IRA's etc.
4.  Where you plan to live when you sell?
5.  How much are you downsizing when you sell?
6.  How much is your home worth now and what you still owe?
7.  What type of pension do you have: defined etc?
8.  In how many years do you plan to collect SS?

By having the above information is the only true way of giving you competent advice.
  • September 27 2009
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Profile picture for Justin Kennedy

ask your servicer if they will set up bi-weekly payment, combined with the extra $300 per month. you should see some real gains and it will cost you maybe a small fee to start up bi-weekly.

  • September 27 2009
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Profile picture for Ray Stevens
As a soon to be retiree who states, "I will have to sell this house ...", you give the impression you would rather stay if you could.

If you are close to 50% LTV, you may want to check into a reverse mortgage when you reach 62.  It will allow you to stay in your current home without making another mortgage payment for the rest of your life.  Go online to learn more about this program.  Talk to a HUD counselor about the program.

If you are not close to 50%, I would not refinance and save the $6000 for your next purchase.  I would also stop making extra principal payments and bank that money also.  Being cash rich for your retirement will give you many more options than sinking $6000 into a refinance and paying extra principal on a home you will sell in the near future.
  • September 27 2009
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Profile picture for dfors2
If you bought 6 yrs ago you will likely find that you actually have no equity at all.  I bought 2 yrs ago and BoA tells me that I will be underwater until 2029 based on a recent appraisal I got.  I wanted to lower my rate and principal and had no interest in cashing out.  Now I not only was denied a refi, I have to consider if making payments is in the best interest of my family.
  • September 28 2009
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Call a lender and have him run the numbers.  My first thought would be get a seven year arm for closer to 4% and throw all the extra at the principal.  first thing to do is to see how many  months it takes to break even on the refi costs.
  • September 28 2009
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Contact your local mortgage consultant.  Do your home work.
  • September 28 2009
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It sounds you're doing our home work. 
  • October 05 2009
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My first thought would be NO!

Especially if your selling the home in a few years. It's really simple....run an amortization schedule from when your current loan began. Compare it to where the new loan will be when you sell. Without even knowing the overall numbers I bet you lunch your worse off by refinancing becuase you already have a 6 year head start on your old loan.

When you sell your home take the proceeds and purchase a home using the Purchase Money Reverse Mortgage Product and never have a house payment again. That program is the best program for somone in your istuation if your finances will allow you to do so without disturbing your quality of life.

By the way I like Coastal Flats alot we can go there. Lunch beats spending $6,000 :)
  • December 23 2009
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DennyCrane....

Pay attention to how old threads are before you dredge them up..if the op decided to refi it is already closed...
  • December 24 2009
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I am aware of the age of the thread simply trying to build contributions and catch up to you Zillow pros.
  • December 24 2009
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Danny,

You don't need to "catch up!" ... You can lead!

By helping the folks with the most recent questions. The ones that are older than a few days, will probably never see your words of wisdom.

A "contribution" that is intended for the person that asked the question. Not for you to "build on." 

By posting on old threads you are doing a mis-service to the ones in need now you're pushing their requests down the ladder (as you did by 13 notches). If everyone would be doing that, recent posting would be on page 45!

  • December 24 2009
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Ah I see...thanks for the guidance.
  • December 24 2009
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