Profile picture for safroz

Refinance Makes Sense?

Home refinance.. I have a 80-10-10 loan 5/1 arm interest only.The first loan is for 417k at 6.125 and second heloc at 6.00. We closed on this home just 6 months ago..and I was wondering if it is prudent to refinance... The home value is 615k
  • January 06 2009 - Issaquah
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (5)

Profile picture for daveskow
tip.....be aware of the " combined loan to value guideline "  for both the potential  new 1st mtg lender and also the  existing  2nd mtg lender ( if the plan is to have this remain in place

some other ideas

single loan  with " lender paid mortgage ins"  ( LPMI)...rate higher than " normal " but still may be lower than present 1st mtg rate ..

thanks
  • January 08 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Saf, it may make sense if your original value is still there. I'm not familiar how values are holding in WA. In SoCA thay are dropping at an aveage rate of 2% per month. If WA vaues have dropped somewhat like CA the 2nd may not subordinate and if they did your 1st would be over 80%. Then you would need to pay Mortgage Insurance (MI). You chose not to do that originally, would you want to do that now? ... Good luck.
  • January 07 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I'd highly consider refinancing the 1st mortgage. If you get a rate of 4.75% on a 30 year fixed (and pay the closing costs out of pocket), your monthly principal and interest payment will increase from $2128/mo to just $2175/mo. At 4.5%, you will pay less than what you're paying now - just $2113/mo. And you will also start paying down the principal.

Your 2nd mortgage can be subordinated to the new first mortgage provided the 2nd mortgage holder agrees.
  • January 07 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Safroz- did you pay substantial fees/points on the loan? If not, a refi MAY be wise. You could even get an amortizing loan and pay what you are paying now. Which would you prefer? To pay toward principal? Or to have a lower monthly payment?
  • January 06 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Of course you would Michael, you are the worst spam offender here.
  • January 06 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.