Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for kg1980

Should I refi?

I am trying to refi. My house has lost about 20K a year in the past 3 years.
We have a primary loan for 225K @ 4.875 and second for 21K@8.0. My house just appraised at 259K.
 I have already locked a rate of 4.0(with 0 closing cost). In order for me to refi the primary loan and keep an 80/20 LTV  I need to pay the primary loan down by 18K and subordinate the second loan.This will save me $230 a month.
Do you think is worth dumping 18K in a declilng house if we are planning on staying here for 8-10 years?
Thanks in advance.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010 - US
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (7)

Best Answer

I would ask your lender if you can apply your lock (4.0% with no cost is a good deal) to a HARP loan (home affordable refinance program) .  On a HARP loan if you pay off your 2nd you should not have to have pmi even if your loan to value on the first is over 80% (assuming you did not have pmi to start with which I imagine you did not since you utlized a piggy back loan  when you purchased or last refinanced).

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010
Profile picture for kg1980
Ramona/Bruce,

Thank you all for the helpful insight.
My mothly payment on the second loan is only $162. So if put 18K toward that loan I will continue to have $162 payment for a couple of year until the rest of the loan is paid off.
If I pay down the first loan by 18K and refi @4.0 I save $230 a month immediatly.

Hope this makes sense.
-KG

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 30 2010
KG, I agree with Ramona.  If you have the money to pay off the 2nd it will be a better deal all the way around.  From a Basic Math standpoint, there are very few investments that are going to earn more than 8% (the rate on your 2nd). 
So, if you have 18K - 21K in some investments that are not earning as much as your 2nd is costing you, then it may be worthwhile to use the money to pay off your 2nd, and reinvest the monthly 2nd mortgage payment or even use it to pay off other debt.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 30 2010
Odds are the 2nd mortgage lien holder will not subordinate the loan knowing that market values continue to decline and your equity position continues to shrink.  Your 1st mortgage rate, historically speaking, is a great rate..I would leave that alone and work to do whatever it takes to payoff/paydown the 8% 2nd mortgage.  Good luck!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010
Is the 4% you have locked in for a 15 yr term or 30?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010
Profile picture for kg1980
Thanks for the reply . I don't qualify for HARP because I refi last year July 09.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010
I replied to your other post.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 29 2010
 
Related Questions
Whether pay off a part of the principal
Profile picture for Sonny Tran
Latest answer by Sonny Tran
15 minutes ago | 2 answers
Do you know of lenders in California that will refinance a "manufactured" home on acreage.
Profile picture for Brandon Dinsbach
Latest answer by Brandon Dinsbach
8 hours ago | 9 answers
Looking to refinance, but do not know the process
Profile picture for Sonny Tran
Latest answer by Sonny Tran
16 hours ago | 1 answers
Need Jumbo Refi in San Diego County??
Profile picture for Steve Mandich
Latest answer by Steve Mandich
16 hours ago | 6 answers
  • Asked by craigmparker2002
  • In Refinance
  • July 15
How long after you purchase an investment property can you refinance?
Profile picture for Sonny Tran
Latest answer by Sonny Tran
17 hours ago | 6 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.