Replies (7)
- James Ryan, "GreatRateFolks"
- Contributions:1257
Hey Joe,
First, may ALL your dilemmas stay this size! I doubt you will save enough on your 68K loan amount to refi that alone. If you are comfortable rolling both loans together, that may be an option, just do a cost/benefit analysis, and if you save enough in your chosen time frame, then it makes sense. Your BofA Loan officer should be able to generate savings figures for you rather quickly!
REMEMBER, reserves are NOT really closing costs, they are fees you will pay to your county and your insurance company whether you refi or not. Plus, your OLD reserves now held by your lender are refunded directly to you. So, 3300 including reserves may NOT be that big a number. Regards,
Jim
First, may ALL your dilemmas stay this size! I doubt you will save enough on your 68K loan amount to refi that alone. If you are comfortable rolling both loans together, that may be an option, just do a cost/benefit analysis, and if you save enough in your chosen time frame, then it makes sense. Your BofA Loan officer should be able to generate savings figures for you rather quickly!
REMEMBER, reserves are NOT really closing costs, they are fees you will pay to your county and your insurance company whether you refi or not. Plus, your OLD reserves now held by your lender are refunded directly to you. So, 3300 including reserves may NOT be that big a number. Regards,
Jim
- HomeSand.net, "White Picture"
- Contributions:4721
Your mortgage balance is $59,296.
Refinancing at 4.75%, 15 years fixed, $5,500 closing cost and point, which roll in to the new mortgage total of $64,796 ($59,296 + $5,500 = $64,796) (in order to pay $504 a month for 180 months).
If you keep paying $594 a month on the new mortgage, your mortgage life is 143 months, almost as same as if your do not refinancing.
You do not save $90 a month, the saving is $3 a month, since you pay $591 a month in 144 months in order to payoff the new mortgage.
The 3rd option is wise move.
Refinancing at 4.75%, 15 years fixed, $5,500 closing cost and point, which roll in to the new mortgage total of $64,796 ($59,296 + $5,500 = $64,796) (in order to pay $504 a month for 180 months).
If you keep paying $594 a month on the new mortgage, your mortgage life is 143 months, almost as same as if your do not refinancing.
You do not save $90 a month, the saving is $3 a month, since you pay $591 a month in 144 months in order to payoff the new mortgage.
The 3rd option is wise move.
- Joe Burmesiter
- Contributions:2
Actually, according to my GFE, my current payoff amount is $61,836. If you add about $3000 in CC to this, the new financed amount becomes $64,800 (monthly P&I of $504 at 4.75%, 15 year fixed)).
If like you say, I keep paying the $594 on the new loan, the amortization table shows I would have loan paid off in 143 months as you indicated. Which is approximately the same amount of time if I do not refinance.
But what you failed to note is the interest savings. Total interest paid for the life of the loan would be $20K (refinance) vs. $38K (no refinance).If I don't pay that additional principal of $90 on the new loan then my total interest bumps up to $25K and I add 3 years to my loan.
Combining the two loans into one is not feasible either. My monthly payment would shoot up to over $2000.If I fall on tough times, and I couldn't make my monthly payment, then I stand to lose my primary residence. I am willing miss a mortgage payment or two on my rental property just to ensure my primary residence doesn't become delinquent.I couldn't do that if i have the two mortgages combined into one.
In the end, I think its a wash on the refinancing the rental. So the safe bet is to do NOTHING. Although I hate the idea of paying 6.5% interest rate in today's market.
If like you say, I keep paying the $594 on the new loan, the amortization table shows I would have loan paid off in 143 months as you indicated. Which is approximately the same amount of time if I do not refinance.
But what you failed to note is the interest savings. Total interest paid for the life of the loan would be $20K (refinance) vs. $38K (no refinance).If I don't pay that additional principal of $90 on the new loan then my total interest bumps up to $25K and I add 3 years to my loan.
Combining the two loans into one is not feasible either. My monthly payment would shoot up to over $2000.If I fall on tough times, and I couldn't make my monthly payment, then I stand to lose my primary residence. I am willing miss a mortgage payment or two on my rental property just to ensure my primary residence doesn't become delinquent.I couldn't do that if i have the two mortgages combined into one.
In the end, I think its a wash on the refinancing the rental. So the safe bet is to do NOTHING. Although I hate the idea of paying 6.5% interest rate in today's market.
- wayne lancaster, "funds2"
- Contributions:1878
I am not sure you have a dilemma.......is the investment property leased and does rent cover the payment? You obviously have a large amount of equity that you could access if ever needed by doing a cash out refinance now or in the future, and if payment is covered by the rent it would not seem to be a need to refinance. Apply any excess rent to the mortgage if cash flow is not tight, and/or sell the rental property.
If you want to keep the rental property for 4-5 yrs.(otherwise don't refinance) or more then refinancing would make sense. Don't count reserves as closing cost since that is your money being put aside to pay your taxes and ins. You could opt to pay your own taxes and ins. and not add those $ to your mortgage balance and payment.
I see no need to think about refinancing your current 4.375% primary residence loan as part of this scenario.......
If you want to keep the rental property for 4-5 yrs.(otherwise don't refinance) or more then refinancing would make sense. Don't count reserves as closing cost since that is your money being put aside to pay your taxes and ins. You could opt to pay your own taxes and ins. and not add those $ to your mortgage balance and payment.
I see no need to think about refinancing your current 4.375% primary residence loan as part of this scenario.......
- Loan Officer, "MarylandMortgages"
- Contributions:2097
It must be "all the Spam you can eat" at Zillow on Thursday nights.
- James Ryan, "GreatRateFolks"
- Contributions:1257
Bob,
LOL
Jim
LOL
Jim
- Clay Branch, "Georgia Loans"
- Contributions:8819
Bob, his nice deal comes with a free mortgagefax and extended warrantable guidelines
Currently, I have a 15-year mortgage at 6.5% with 12 years left on it. Loan: $68K: Value: $209K.
I am wondering if I should refinance again to bring my monthly payment down (P&I currently $594). BOA is offering me a rate of (investment property) 4.750 % (APR 5.116%) for a 15 yr Fixed which would bring my monthly P&I down to $504. But they are charging a whooping $3,300 in closing costs (including reserves). Is it really worth the cost to refinance just to save $90 a month? I have been renting this property for 10 years now and don't know how much longer I can keep doing this (my primary residence is in another state).
Another option would be to do a refi on my primary residence (15 yr fixed at 4.375, loan: $155K, value: $250K) and combine the two mortgages into one.
The 3rd option is to do nothing! I am leaning towards this more and more every day. But I would be interested in hearing what others have to say on my dilemma.
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