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Move or Refi?

I purchased my home 4 yrs ago.  I have a rate of 6.5%.  WIth todays rates I could afford a much larger home paying what I pay now or possibly less.
I have tried to refinance, but my appraisal came back rather low leaving my out of pocket exspense to refi at about $12-15K. 
My home does need some cosmetic work (new kitchen, landscaping).  Do I wait out this market and make the upgrades while continuing to pay the higher rate?  Or should I sell my home?  I would like to take advantage of the current rates in the smartest way.  Please help!

Thanks
  • January 01 2011 - Springfield
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Answers (2)

Ian has some good advice. I agree that you need to establish your goals and then decide what to do from there. Good Luck!
  • January 03 2011
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Profile picture for Ian Wood
What is your end goal? Just a lower payment or a better home?

How long do you plan to stay in your home if you did the refi? How long would it take for you to make up a $12,000 difference in payments? If you plan on staying in the home long enough to make up the difference, and then some, the refi might be worth it.

What would you buy if you sold your house? A nicer house, less of a house? If you sell you could end up paying commissions, title insurance, closing costs for a buyer, etc., but you could likely buy a nicer home for less of payment.

It sounds like you already had some good faith estimates from a lender for a refi. First, find out what you would need for a purchase. Second, contact a local Realtor to find out what you could likely net from the sale of your home, and what you could buy next. Put the refi and the potential sale/purchase side by side and weigh the pros and cons of the effect on your lifestyle. I think you'll find your answer somewhere between the bottom line and what will make you happy.


Hope this helps.
 

 
  • January 03 2011
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