Profile picture for MindyWhipple

refi then sell.. or just sell?

I am financially strapped at 6.75% in a high tax area home.  I am going through a divorce and am struggling.   I have the opportunity to refi at 3.25% but the loan increases.  the home as is is appraised at $118,000.  what is owed is approx $99,000  if I refi it goes to $106,000.   the paymt per month saves me approx "$200 can I then sell after some breathing room?   or should I just sell outright and begin again

  • January 02 2013 - US
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Answers (3)

Profile picture for Outer Banks N C
Normally a refi takes several years for the savings from it to offset the cost of doing it. Normally it is about 5 years to recoup the expense of the refi itself. It, therefor, makes no sense to refi and then sell. If, on the other hand, you plan to remain in the house for several years it does make good sense to refi. This is a judgement call on your part. Finding a refi that offsets itself sooner than 4-5 years will also make it more desirable to do. Good hunting.
  • January 02 2013
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Profile picture for Ofe Polack
You are saying that you are going through a divorce but do not say if the property is under your name only or both of you, which may be tricky.  If you are planning on staying in the property for a while say 4-5 years minimum you may want to refinance.  I suggest that you contact a few listing agents and ask them to do a comparative market analysis of the property to see what it would sell for.  Beside paying a high interest you could easily be underwater, I believe you may be refering to the assessed value at $118,000 not necesarily the appraised value, is that correct? 
  • January 02 2013
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Profile picture for MindyWhipple
the property is only in my name( thankfully) and through our legal agreement it remains mine.   the assessed value is $118,000 and the comparatives in the market are selling $99-125, depending....

I realize by refinancing I lose the equity I have already built into the home, by in a sense "beginning again" with a new loan.   My thought originally was save some money monthly, use the 4-5 yr window to continue improvements and allow the housing market to also recoup and then sell... as I have also just put a brand new roof on.    But, .. I also do not wish to "live" for a house.   If, I sell now... I "may' be able to sell for $115- 110  and iwth the payoff being $99 but now through in realestate costs, etc...  I am just trying to balance it all out...   and if I try to sell within the next 2-3 yrs... I won't get as much ...but.. I still have the breather of a $200 a month savings in the meantime at a 3.25%...    but the home needs things, I can't provide but someone with some know how, money and vision can.....    Just don't want to go from frying pan to fire...  and then ....out into the street....so to speak.
  • January 02 2013
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