Need REFI - MORTGAGE help!

[scrapquitler]

Here's the question that I have:

If your existing balance is $155K, why are you taking out a $245K loan?

I'd be leery of a payment schedule that includes an every other week bank draft, you can do the same thing yourself by paying 1/12 of a payment extra each month, or just adding that 13th payment yourself at the end of the year. With that automatic draft, if a pay period comes by where your hubby doesn't have enough commissions, you could get into trouble quickly.

Instead of looking at your payment, I'd be looking at the total interest you will be paying out over the life of the loan (that would make the decision for me, I'd go with paying the least total interest over the life of the loan).

 

[samples78]

I have a quick question - why would your payment only be going down by $300? Are you getting some money back on the refinance or is the loan term shorter? If you are financing $155,000 at 4.5% for 30 years vs. $245,000 at 5.37% for 30 years, I am getting that your loan payment should go from approximately $1370 to $785.

I am assuming there is something I am missing

 

[annabelle]

I have a quick question - why would your payment only be going down by $300? Are you getting some money back on the refinance or is the loan term shorter? If you are financing $155,000 at 4.5% for 30 years vs. $245,000 at 5.37% for 30 years, I am getting that your loan payment should go from approximately $1370 to $785.

I am assuming there is something I am missing

Yes... I meant to say that $245k was the PURCHASE price. We put 5% down, took out a 15% piggy back loan to avoid PMI (paid off promptly) and have since carried the remainder 80% thru Chase. So it was 80-15-5 split. The mortgage amount NOW is based on the 80% portion of around $196k. With escrow, ins and taxes we pay $1321/mo at 5.375%. Our payment would be around $300 less refinanced at 4.5% and will be roughly just over $1000/mo.

Sorry that was confusing. I typed my initial post too fast... knew what i was trying to say but miscommunicated. My bad.

 

[brymolmom]

I haven't examined the responses or done any Math on this but wanted to share my experience. DH and I have about 12 years left on our mort. - about $114,000 left out of $210,000 original. We have a5.75% rate and have considered twice over the last year refinancing...the lowest figure we got was 4.20%. My genius BIL ran all the numbers for us, and when considering the closing costs, mortgage tax, points and figuring taking that $x,000 and investing it or putting it all toward the principal in one shot - it ended up basically as a wash for us. We also pay extra $$ toward the principal - a bit more than 1/12th a month - and because we will pay it off early due to this - means that we won't be paying that 5.75 for as long as we were supposed to. Anyway, I can't tell you in exact figures, but I can tell you the actual 'savings' were very small. So unless you truly want a smaller payment or other reason for doing this - since your numbers are similar to my own - make sure to figure this into your thoughts.