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Profile picture for Sooner2915

Refinance or Sell?

I have a home that I bought for 142,000.00 and owe around 130,500.00.  My situation has changed since buying the home, with me commuting to work 2 hours a day and a lower salary.  My interest rate is 6.3 on the current loan 30 year fixed.  Which would be better right now.  Sell or refinance.  I really don't care about the commute, it is just getting difficult to make the payments.  Also, if I refinance will the payments go up again in a few years due to escrow?  Thanks
  • April 15 2010 - Fort Smith
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Answers (4)

Profile picture for tonygim
Sell
  • April 15 2010
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Profile picture for funds2
Seems like the question you need to answer is whether the house still meets your needs. There are options available that could reduce your payment by $180 month, but that would only be a good option if you stayed in property for 3 yrs. or more.
If you decided to sell what are your housing alternatives? Compare staying and refinancing vs selling and moving options.
  • April 15 2010
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If you own a property more than three to five years, the odds, of the escrow portion of the payment increasing, are fairly high. Between insurance costs rising, and property tax costs rising, it is almost inevitable. Are you paying for Mortgage Insurance? If so, when it is able to be removed your escrow payments will go down.

How is your market? Selling now could be painful. refinancing will save you a little, but maybe not enough to reduce your financial strain enough to be comfortable. Hopefully, your pay will get better.

If I were you, I would simultaneously speak with a RE Agent about your market value, if you sold, and a Loan Officer, about potential refinance savings available.

If you use the calculators Sunnyview recommended, use 4.875 to 5.125% for the new rate, and see if savings are worthwhile.

Right now, your predicament hinges on your property value.
  • April 15 2010
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Profile picture for sunnyview
There is a refinance break even calculator here that might help you run some numbers. The interest rate on the mortgage will depend on your credit score, but you can at least take a look to see what rate would make sense to refi.
  • April 15 2010
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