Profile picture for rkvijay2

Is refinancing at 5% or less for 30 yrs is a good option

Bought my house 4 yrs ago for 600K with 15-down on 5/1 ARM loan at 5%. It is not a Fannie Mae or Freddie Mac loan. Paid down $50K since. Current Principal amount is 460K. Credit score > 750. Home value down to 470K. No default in pmts.

Is refinancing at 5% or less for 30 yrs is a good option or wait for the arm to end?   Might have to come up with 80k to meet 20% down requirement.

Are there any better programs?

  • November 18 2009 - Ashburn
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Answers (6)

If by better you mean to fix your rate now, before they go up, then yes,..this is better. This was a great week for rates. Get off your fence if you are deciding to stay in your home.

  • November 18 2009
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Profile picture for Cherlann
The problem with waiting is as the market gets better the rates are going to increase. But if you wait the value may go back up. It may not go back up to the original purchase price but it may go up to where you will not have to bring anything to close. It is a roll of the dice...but it only depends on what you prefer to do.
  • November 18 2009
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$83,600 would put you at 80% LTV. If your County Limit Allows you will have a Conforming Jumbo Loan Amount. 5% is about right for a 30 year fixed rate plus fees.

I primarily work with borrowers with jumbo loans . ARMS are always popular because of the great difference in rate. But, now is a terrific opportunity to latch onto a 30F if you have the resources at 80% LTV. ... Best wishes!
  • November 18 2009
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There are always programs.....
  • December 23 2009
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One of my client who lives in Ashburn that similar situation, his lender I think it was Citi let him reset the mortgage with a 30 year fix at current market rate. I am not a lender but you may want to check with your lender if they have any program.
Also have you reviewed your note? Ask a lender to help you understand what happens if you don't refinance or reset your mortgage how often your interest rate fluctuates and reset too.
  • February 22 2010
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If the full amount needed to pay down the mortgage is not available consider an 80/10 refinance.

A first mortgage at $376,000 and a 2nd at $47,000.  You then only need about $42,000 - $45,000 additonal cash.  A local credit union would be the best option for the 2nd mortgage.

Give consideration to the time you intend to remain in your home along with the next adjustment date and the rate adjustment caps.

But, more than likely a refinance if the cash to do so is available, would be your best option.

  • March 06 2010
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