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Should we re-finance?

We are 5 years into a 30 year fixed at 5.5%.  We still owe $240,000.  The value of our home has dropped from $400,000 at purchase in 2007 to $200,000 today.  We are receiving an offer of 4.25% for a new 30 year.  
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August 13 2012 - San Diego
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Answers (2)

For 240,000 loan on 200,000 value it sounds like you are doing a HARP refinance.

4.25% sounds very high, unless it is "No Cost" loan in which case it is only a little high as opposed to very high.

Are you being charged closing costs at that rate?

Certainly with 5.5% rate you will stand to benefit from refinance if you qualify.   You might want to look also at 25 or 20 year loans for better potential terms, depending on if your goal is to create cash flow with payment savings or to pay off at a faster pace.

I am in Mission Valley, San Diego, feel free to contact me through my profile if you would like to look closer at your options.
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August 13 2012
Hello,

We don't have enough information on your current offer to tell you if it is a good one or not but to answer the question "should we refinance" I would have to give you a resounding yes based on the information you have given us!

The cash flow you can generate, and the opportunities it will create (be they lifestyle, wealth building, principal reduction, or a combination of all three), would be very hard to pass up.

This, of course, assumes you want to stay in your home and don't plan on pursuing a short sale.

Sincerely,
Greg Cowart

Innerwork Mortgage
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August 13 2012
 
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