Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
they were still lower 2 years ago, because there wasn't a liquidity issue. i wouldn't be surprise if we saw 4.5% for great credit people, if they ever address the actual problem.
If I re-fi with a 25 year loan at 5.375 (vs 6.0% now), my mortgage payment will go up 12 bucks a month. In 7 years (an example of when we might sell), I will owe 10,000 less on the balance. Furthermore if I ride the mortgage until the end, it will end 4 NET (from start of original mortgage date) years earlier. By December 2010, I will be AHEAD of my original mortgage already. So a 2 year pay off, this is with 0 out of pocket. I talked to one bank who thought I should aim for a 1 year pay off???
Thoughts???
Last edited by joe moving; 12-01-2008 at 03:51 PM..
If you're reasonably sure that you won't move before the break-even then the only thing to hold you back ought to be the liklihood of future rates drops. My gut tells me that some are coming, though pretty minor.
I would not sweat about a "1 year payback" unless you think you are going to move soon after that...
If I re-fi with a 25 year loan at 5.375 (vs 6.0% now), my mortgage payment will go up 12 bucks a month. In 7 years (an example of when we might sell), I will owe 10,000 less on the balance. Furthermore if I ride the mortgage until the end, it will end 4 NET (from start of original mortgage date) years earlier. By December 2010, I will be AHEAD of my original mortgage already. So a 2 year pay off, this is with 0 out of pocket. I talked to one bank who thought I should aim for a 1 year pay off???
Thoughts???
first of all where did you come up with a 25 year amortization period?
when you talk about the rate difference, i am assuming you are calculating the total cost to refinance into the new payment to and comparing to see how long it will take to break even with your current payment?
i am not sure what you are talking about with the 4 net years earlier. you have no stated anything about making extra payments, which is probably much more beneficial if you just did that instead of refinancing.
why don't you give me some real numbers and i can give you some real answers.
what is your mortgage balance, 1st and/or 2nd?
are you stating that you are currently ahead on payments?
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,793 posts, read 58,301,504 times
Reputation: 46299
I usually like to see 1.5 to 2% lower before I refi, but I don't usually plan on staying too long. (less than 2 yrs expected stay in current joint)
I'm on a 7/1 ARM at 4.125% at the moment with a 25% LTV ratio. I hope the LIBOR tanks, and I expect it to converge closer to the Fed rate. I don't expect this gravy train to last beyond Obama 'mid-term'
Having Volcker hanging around the interest rate gurus scares me (BTDT... 12%+ for housing, last time he was setting rates).
The Republican attempt to get something passed dictating 4% mortgage rates failed; however, the Treasury is talking about it. I wish I knew what was around the corner. I also read rates are expected to vaciallate between 5-6% and stay at about that for a while. Who knows.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
