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Answers (14)
- TCMW
- Contributions:46
You might consider cash-out refinancing into a 10 year fixed. This way you don't lose a whole lot of ground on your financing and you'll make it up over the life of the loan with a rate near 4%. You'll make up more ground when you factor in the debt that you're going to pay off. a 15 year is worth considering too. Like a previous poster mentioned, you can always pay extra if you don't need the cash flow. If you make the same payments on a 30 year loan at 5% as you would on a 10 year loan at 5%, they're the exact same thing. The pop-economic myth about interest being front loaded isn't very accurate. I'd be glad to answer any questions and even take care of it for you if it makes sense to. I've been in the biz for over a decade and have no problem helping you figure out the right way to handle it.
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- Dave Mason, "DebtFreeDave"
- Contributions:1315
- Barry Dalton, "Barry Dalton"
- Contributions:492
I would not touch the first either if possible. The bulk of the interest has been paid.
- MagicalHouse
- Contributions:261
Your so close to the end on your first don't lose sight of the ball now. You will breath easier than most of america when you eliminate that debt. Then you can really work on the savings.
- Martin Wareing, "Martin Wareing"
- Contributions:3772
KK,
That is not a bad option to consider all angles and needs. danno, no matter what we want it to look like, smell like... it is debt.. We can put lipstick on it (interest free, deferred, etc.) but it is just debt. We have 9 yrs 9 months... I can see light. I am 44.. This is a marathon and you are at mile marker 20... refocus and attempt to catch a 2nd wind.. Who gives a crap about the stock market if you are really debt free? If you get there (as fast as you can), your income will be a hyper-fast wealth accumulating machine in your 50's. I have my eyes on the prize and I make my living putting people in debt. Actually, I make my living putting people in the right debt. Look at all your options and weigh them against your real needs and wants. It's all good.
That is not a bad option to consider all angles and needs. danno, no matter what we want it to look like, smell like... it is debt.. We can put lipstick on it (interest free, deferred, etc.) but it is just debt. We have 9 yrs 9 months... I can see light. I am 44.. This is a marathon and you are at mile marker 20... refocus and attempt to catch a 2nd wind.. Who gives a crap about the stock market if you are really debt free? If you get there (as fast as you can), your income will be a hyper-fast wealth accumulating machine in your 50's. I have my eyes on the prize and I make my living putting people in debt. Actually, I make my living putting people in the right debt. Look at all your options and weigh them against your real needs and wants. It's all good.
- Ken Kopper
- Contributions:1578
I will probably catch hell for this from others but maybe even look at the 30year fixed..that loan will free up some disposable cash to sock away for retirement, you can always accelarate the principal reduction on the loan when its convenient for you and despite not having a crystal ball, hopefully property values will have recovered and possibly even appreciated some in the next 14 or 15years...
Maybe even sit down with a financial planner to work out all of your options.
Maybe even sit down with a financial planner to work out all of your options.
- dannoman
- Contributions:3
Hi Ken,
I would imagine we'll be in our home at least until the 1st is paid off. We have approx 50 K in equity. We'll both have to work until we can collect SS....so at least 14 years for me.
I would imagine we'll be in our home at least until the 1st is paid off. We have approx 50 K in equity. We'll both have to work until we can collect SS....so at least 14 years for me.
- dannoman
- Contributions:3
Thanks all....sure appreciate the quick replies. Copuple things I didn't include in my original post. Wife and I are 48 and 45, both have worked hard all our life, just seems like the minute we see a glimpse of light, we get hit with some other expense.(usually medical) We've watched our retirement accounts tank....like everybody else. Just get tired of feeling like we're swimming upstream. If I were to define our goals, I guess it would to be to get our son through college w/o incurring alot of debt, decrease our cash outflow, and get rid of our 2nd and cc debt. Our home is worth 200K. I don't like the thought of touching our 1st either. What about consolidating everything but our 1st? Would it be wise to use loans for college? They are interest free until after he graduates. Makes sense, but again.....just more debt.
- Martin Wareing, "Martin Wareing"
- Contributions:3772
LJ,
I am alive and well for as well as FL can be these days. Hope all is well in Zona. :)
I am alive and well for as well as FL can be these days. Hope all is well in Zona. :)
- Larry Jacobson, "Clearpoint"
- Contributions:1214
Martin is ALIVE!!!!
- Martin Wareing, "Martin Wareing"
- Contributions:3772
danno,
Look at KK and Rudi's advice. Your achilles is your current amortization scheduled being so short.. That is also the good news as well. You will be out of debt before you know it. The bad news... rates have less impact when 2 things happen: shorter terms and smaller balances. Ufortunately, you will not see a huge payment differential because you are just not paying that much interest in real dollars. Congrats and if you could get a "FREE" refi with a great rate,, grab it.. Is it out there right now.. not yet, but keep looking.
Look at KK and Rudi's advice. Your achilles is your current amortization scheduled being so short.. That is also the good news as well. You will be out of debt before you know it. The bad news... rates have less impact when 2 things happen: shorter terms and smaller balances. Ufortunately, you will not see a huge payment differential because you are just not paying that much interest in real dollars. Congrats and if you could get a "FREE" refi with a great rate,, grab it.. Is it out there right now.. not yet, but keep looking.
- Ken Kopper
- Contributions:1578
Dannoman, to play devil's advocate here to other two..How long are you considering staying in the property and how much longer until retirement? How much equity do you currnently have in the property?
Maybe look at wrapping all the debt together into a 10yr or 15 yr fixed rate note. Definitely do not touch the savings as this is your safety blanket.
Maybe look at wrapping all the debt together into a 10yr or 15 yr fixed rate note. Definitely do not touch the savings as this is your safety blanket.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Dan,
I certainly would not touch your 1st with only 9 years left before paid off. If you want to take care of debt you may want to contact your bank or another local bank about a Heloc or fixed rate 2nd large enough to take out your current 2nd and your debt consolidation. Most Helocs are around Prime (3.25%) + !%. .... Best wishes, Rudi
I certainly would not touch your 1st with only 9 years left before paid off. If you want to take care of debt you may want to contact your bank or another local bank about a Heloc or fixed rate 2nd large enough to take out your current 2nd and your debt consolidation. Most Helocs are around Prime (3.25%) + !%. .... Best wishes, Rudi
- Real Estate blueBird
- Contributions:18
Congrats for taking the first step and gathering more information before making a decision. The answer to your question will not come from a lender but from a further analysis of all of the benefits of each scenario you have presented.
Its important to identify all of your goals that you wish to accomplish and then prioritize them. For example, refinancing your first and second mortgage into loan terms longer than what you have remaining will result in cash flow relief that may significantly improve or contribute to the easing of these challenges now, ie... college tutition, credit cards bills. However, by doing so you would need to look into the long term cost by extending your current loan term.
I typically advise that you put the numbers on paper so that you make an accurate analysis of the positives and negativess of any desicion you would make. Weigh that, then against your goals as you have prioritized them and you have the recipe for an educated and informed desicion making process.
Godd luck :)
Its important to identify all of your goals that you wish to accomplish and then prioritize them. For example, refinancing your first and second mortgage into loan terms longer than what you have remaining will result in cash flow relief that may significantly improve or contribute to the easing of these challenges now, ie... college tutition, credit cards bills. However, by doing so you would need to look into the long term cost by extending your current loan term.
I typically advise that you put the numbers on paper so that you make an accurate analysis of the positives and negativess of any desicion you would make. Weigh that, then against your goals as you have prioritized them and you have the recipe for an educated and informed desicion making process.
Godd luck :)
Refi advice please
D
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