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Answers (13)
- Andrew Adams, "203K Specialist"
- Contributions:9349
What was your original loan amount or Purchase
price and when did you buy?
I don't think the refinance will be the benefit you hope it will be...add into it the costs and additional risks. You may want to consider seliing. Probably not what you want to hear but if you are struggling to make the payments at 5% fixed and a temporary increase in your escrow payment makes the home unaffordable you will likely just buy your self some time and be facced with the same issue down the road. Heating systaem goes...hot water heater...If you cannot handle unexpected expenses your budget is too tight and you need to change that.
price and when did you buy?
I don't think the refinance will be the benefit you hope it will be...add into it the costs and additional risks. You may want to consider seliing. Probably not what you want to hear but if you are struggling to make the payments at 5% fixed and a temporary increase in your escrow payment makes the home unaffordable you will likely just buy your self some time and be facced with the same issue down the road. Heating systaem goes...hot water heater...If you cannot handle unexpected expenses your budget is too tight and you need to change that.
- jcutler81
- Contributions:4
Thanks for the overwhelming and predominantly unanimous response. I appologize for not getting all the info straight. It was a 5-year, not a 3-year arm.
I will have the guy draw up the papers and have my step-mom review, the is a loan officer for NWFCU.
Do you think a 5-year is pretty much the same situation as a 3?
As far as property values, according to Zillow, mine has only seen increase since we purchased. The middle-range for our property has gone from 210k in Aug. 2009 to 265K in Feb. 2011. How near realistic are zillows estimates typically?
I will have the guy draw up the papers and have my step-mom review, the is a loan officer for NWFCU.
Do you think a 5-year is pretty much the same situation as a 3?
As far as property values, according to Zillow, mine has only seen increase since we purchased. The middle-range for our property has gone from 210k in Aug. 2009 to 265K in Feb. 2011. How near realistic are zillows estimates typically?
- Scott Harward, "AZLoanProScott"
- Contributions:8
It seems that the answer is almost unanimous from the responses I've seen, and I would agree that going from a fixed 30 yr. at 5% to a 3 yr. arm (although it would be a lower rate) is not a good solution. With higher monthly mortgage insurance payments and closing costs, you will probably not really be any better off and especially not when the three year term comes to an end. If you are like me, I like to see things on paper, so I would suggest you go over all of the numbers with a seasoned loan officer to really fine tune the situation and make sure of your decision before moving forward. With the decline in values it is possible that next year your taxes may go back down again depending on the market you are in.
- John Farrell, "Mortgage by John"
- Contributions:10
I concur with Dave. Your Monthly MI will go up to .90% from your existing MI rate. I would not consider the deal, however I would sit down with someone you trust (Mortgage Advisor) so you can see the physical numbers yourself. Most likely there will be no savings and you will incur cost that exceed any savings/benefit!
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
You'll regret going into an ARM. The end result will be minimal savings and the $125.00 is only to catch your impound account up to it's proper level. This extra $125.00 shouldn't continue for more than 6 to 12 months.
Happy funding, Rudi
Happy funding, Rudi
- Dave Skow, "daveskow"
- Contributions:1105
scary when you hear "I haven't actually seen what the payment would be on the new loan"
- Al Rodenburg, "Al Rodenburg"
- Contributions:27
Your 3yr ARM lender is not being up front with you. Suggest you run, not walk - to someone close by, that will give you a detailed analysis of your situation. On its face, I don't see any option other than staying with your current fixed rate loan.
- Clay Branch, "Georgia Loans"
- Contributions:7836
dittos to Justin's post
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3427
If you are truly in a situation where you are at risk of not being able to make your monthly payment, you should look instead at the 5/1 ARM, not the 3/1 ARM. The rate offered should be pretty much the same and it would provide 2 more years for you to figure out how to get some additional income to sustain your payments.
Fixed to ARM is a recipe for disaster, but if makes the difference between affording the house and defaulting on it, the streamline might be a solution to you.
Any lender that is soliciting 3/1 ARMs and selling skipping a payment as a benefit is utilizing aggressive and unscrupulous tactics. I would advise you to proceed with extreme caution.
Fixed to ARM is a recipe for disaster, but if makes the difference between affording the house and defaulting on it, the streamline might be a solution to you.
Any lender that is soliciting 3/1 ARMs and selling skipping a payment as a benefit is utilizing aggressive and unscrupulous tactics. I would advise you to proceed with extreme caution.
- jcutler81
- Contributions:4
Thanks for the advice... Can't cut back anywhere else... We have gone bare bones as possible. Even going down to one vehichle.
I haven't actually seen what the payment would be on the new loan. I have only spoken to the lender twice, but wanted more info before making a decision.
Thanks!
I haven't actually seen what the payment would be on the new loan. I have only spoken to the lender twice, but wanted more info before making a decision.
Thanks!
- Dave Skow, "daveskow"
- Contributions:1105
cons- higher mtg ins per month...changing from a fixed rate to an ARM...incurring lots of costs
pros- none really
pros- none really
- Andy Matejka, "tejks"
- Contributions:352
Clay is 100% correct.
If you really want to save money, pay extra principal as often as possible so that you can pocket the equity.
If you really want to save money, pay extra principal as often as possible so that you can pocket the equity.
- Clay Branch, "Georgia Loans"
- Contributions:7836
Keep the 5% fixed rate and cutback on something else to cover the 125/month increase. The monthly MI payment is higher on a new FHA loan so your net savings may not be that great or even enough to qualify. What is the total payment on the proposed loan compared to your existing payment?
I spoke to someone about an FHA Streamline... what are the pros and cons? Should I do it?
The reason I am considering this is that I had a negative escrow balance so the escrow is jumping my monthly payments by about 125.00 a month and we cannot afford that. It would also be helpful to skip a month which is what they guy I spoke with said would happen.
Thanks for the advice.
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