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#4688533 - 03/08/18 09:49 AM Should I refinance my home?
jay929 Offline

Registered: 11/09/08
Posts: 113
Loc: IL.
Bought my townhome in 2005 for 105,000. I still owe around 55,000 and my rate is 6% for 30 year fixed. Home is probably worth around 70,000

I'm always getting refinance stuff in the mail especially harp

Edited by jay929 (03/08/18 09:51 AM)

#4688535 - 03/08/18 09:52 AM Re: Should I refinance my home? [Re: jay929]
eljefino Offline

Registered: 06/15/03
Posts: 32637
Loc: ME
The fees will kill ya.

#4688542 - 03/08/18 09:58 AM Re: Should I refinance my home? [Re: jay929]
jay929 Offline

Registered: 11/09/08
Posts: 113
Loc: IL.
Ugh, Maybe just stick to making extra payments and pay it off early like a plan I guess. That 6% number is hard to swallow though

#4688547 - 03/08/18 10:02 AM Re: Should I refinance my home? [Re: jay929]
supton Offline

Registered: 11/09/08
Posts: 11963
Loc: NH
You have to run the numbers. Get an Excel sheet, or at the very least a piece of paper. Calculate what you will spend if you just keep paying as you are right now. Then find out what the closing cost on a refi will cost, then add in what you will now spend. That will tell you more than anything we can tell you.

Will say that this is predicated upon you staying there for the duration. If you move in a year or two, then it is unlikely that you would be ahead by refinancing.

FWIW, I bought mine in 2005 also. 6.125%. Refi'd back in 2010/11 into 3% & 15 years, for the same payment I shaved years off. I watch the rates going up now and think, man am I glad I did that.

Oh, and if you don't have PMI right now, you might pick that up. Bank might decide the house is worth less than you think. When I did a refi I wound up getting PMI--but my total out of pocket was still less, over the long haul.
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#4688548 - 03/08/18 10:03 AM Re: Should I refinance my home? [Re: jay929]
JohnnyJohnson Offline

Registered: 10/22/09
Posts: 2745
Loc: Wet side WA
Fees could kill you. But if they are high on fees go else where. My sister did they years ago when she was looking to replace her 11.75% rate. Then she went back to the bank she got the original mortgage from. They said no problem all fees would up being $500. She went to 6%. You will know in a hurry if they are trying to rob you just walk out the door.
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#4688561 - 03/08/18 10:10 AM Re: Should I refinance my home? [Re: jay929]
pandus13 Offline

Registered: 08/12/11
Posts: 3196
Loc: Chicago,IL,USA
Check around your neighborhood for a broker: they could compare multiple banks and be aware of fees+costs.
Also, neighborhood/community banks could help since they may have programs in place. (I assume because of lower value townhome)
Also, check with your local bank.

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#4688564 - 03/08/18 10:11 AM Re: Should I refinance my home? [Re: jay929]
bubbatime Offline

Registered: 03/18/08
Posts: 5627
Loc: South Florida
If you don't plan on moving soon, then YES, I would absolutely refinance. You probably could squeeze a ten year fixed rate mortgage at 3.65%. Would save you a TON of money, and the mortgage would get paid off much faster and with much less interest.
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#4688567 - 03/08/18 10:13 AM Re: Should I refinance my home? [Re: jay929]
alarmguy Offline

Registered: 07/10/12
Posts: 2152
Loc: South Carolina
You dont say what your original mortgage amount was. If it was 100,000 and you refinance now your new payment will be around $407 a month for 15 years, that should include all fees and costs..
Just google online mortgage calculator as its impossible to know exactly, area of the country ect..
I would suggest if you have a nearby credit union to also talk to them.

Edited by alarmguy (03/08/18 10:14 AM)
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#4688572 - 03/08/18 10:22 AM Re: Should I refinance my home? [Re: jay929]
BJD78 Offline

Registered: 08/05/17
Posts: 493
Loc: Nebraska
If you do it in the first 2 years and if the interest is at least 2% less it might be worth it. The trouble with refi is that that clock starts all over again. With only 17 years left you would likely be better off just making an extra $50to $100 per month on principle only pay and you would probably shave that 17 yrs down to 14 or 15 years. There are some online calculators that can crunch those #s. Everyone with a mortgage get these HARP mailings. HARP takes away the equity that is built up. Makes the bank ledgers look better for the Government that bailed them out. Harp might have a lower payment per month, but in the long run, you will pay more, especially when they reset your loan, there goes your equity. A quick search of HARP reveals many many consumer complaints. I would be very wary of HARP. Probably not worth restarting the clock if you are already 13 years into a 30 yr mortgage, unless they drop that rate to 2% instead of 6%. Probably cannot get banks to go that low with a 30 yr, a 10 yr or 15 yr mortgage...maybe.
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#4688576 - 03/08/18 10:25 AM Re: Should I refinance my home? [Re: jay929]
jay929 Offline

Registered: 11/09/08
Posts: 113
Loc: IL.
Some good info I bought it for 105,000 and put 20% down so no PMI

#4688585 - 03/08/18 10:36 AM Re: Should I refinance my home? [Re: jay929]
thooks Offline

Registered: 11/30/05
Posts: 827
Loc: Senoia, GA
It doesn't cost you a dime to send more money each month.

That's the quickest way to get rid of the mortgage.

If you refi, what's the rate? 4%? The difference on $70k is negligible. The fees are going to cost $2000 at minimum. I bet that $2k would make a better impact on the principle. Then raise the amount you pay every month to as much as you can stand. Make SURE it is earmarked for PRINCIPLE ONLY.

#4688596 - 03/08/18 10:49 AM Re: Should I refinance my home? [Re: jay929]
Jimzz Offline

Registered: 10/03/14
Posts: 1145
Loc: NoVA
Probably not worth it now. Rates have come back up and the money you would spend on fees you could just pay extra into the mortgage.

So pay extra every month into the principal and you will have it paid off in no time.

#4688598 - 03/08/18 10:52 AM Re: Should I refinance my home? [Re: jay929]
wallyuwl Offline

Registered: 06/02/09
Posts: 1777
Loc: Wisconsin
A good number of banks have fees under $1000 on a refinance. Some around $500. If you refinance with the same lender they may be close to zero. We bought our house in 2008 with a 30 year fixed and refinanced in 2013 to a 5/1 ARM with a 20 year amortization and cut our rate more than in half. Our payment went down about $100 per month and we were applying about $100 more per month toward principal. We knew we'd leave the house before it started adjusting in 5 years (and we did). We refinanced with the same lender for zero closing costs, because they didn't have to do the appraisal or any of that.

You'd have to run the numbers, but if you can find a low fee refi then it is probably worth it to lower your term to 10 or 15 years and lower the rate (you should be able to get less than 4% on a 10 or 15 year, maybe even close to 3%). It might even lower your payment, too.

Look at local/regional banks and credit unions. The big guys will screw you on fees.

My question is... how is a house you bought 12 years ago for $105k now only worth $70k? The market has fully recovered from the crash and then some.

#4688599 - 03/08/18 10:54 AM Re: Should I refinance my home? [Re: jay929]
Bandito440 Offline

Registered: 02/13/12
Posts: 3854
We have no way of knowing without detailed information on what a new mortgage would cost you. The comments here of yes or no are provided with insufficient data.

Shop around for a 15 year fixed and let us know the best interest rate that you can get as well as the closing costs.
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#4688618 - 03/08/18 11:11 AM Re: Should I refinance my home? [Re: jay929]
4WD Offline

Registered: 09/21/10
Posts: 6378
Loc: Texas
Originally Posted By: jay929
Bought my townhome in 2005 for 105,000. I still owe around 55,000 and my rate is 6% for 30 year fixed. Home is probably worth around 70,000

I'm always getting refinance stuff in the mail especially harp

Are you saying it lost value or we talking equity value?

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