Rates are down (Jan 2015), Equity in House it Up, Refinancing Again

[BridgetBordeaux]

Rates have been bouncing along multi-month lows.

In the past 2 years our home value has increased.

We can now refinance conventional because we are at 20 percent equity.

Check you loan balance and check on your neighborhood values.

Things have improved since we last did this 3 years ago.

 

[barkley]

Rates have been bouncing along multi-month lows.

In the past 2 years our home value has increased.

We can now refinance conventional because we are at 20 percent equity.

Check you loan balance and check on your neighborhood values.

Things have improved since we last did this 3 years ago.

does this mean you can dump your p.m.i. and lower your payment even more? if so-CONGRATS we were so thrilled when this happened with our first home.

 

[BridgetBordeaux]

Yep......no pmi....and a lower payment.

We aren't saving a ton, but over the months and years it will add up.

Our refi guy says they are real busy right now.

 

[tnd]

Great idea! We refinanced in late 2013 to a 3.875% rate (down from 5%) and eliminated PMI thanks to rising home values, but rather than reduce our monthly payments, we chose to go to a 20 year mortgage. We kept roughly the same payment, but reduced our repayment period by 7 years.

 

[disney1990]

This is a wonderful thing to do as long as you do not take the equity out of your house. We did this a couple times over the years and paid our house off in less than 15 years.

 

[tvguy]

This is a wonderful thing to do as long as you do not take the equity out of your house. We did this a couple times over the years and paid our house off in less than 15 years.

Other than taking enough equity out to cover the refi costs, I agree. Never ever take equity out of your house.
As I have posted before, my neighbor has been in his house 30 years, and owes more today than he paid for it because he and his wife always took any equity out. Sad thing is, after his wife passed away a few years ago, he said he has no idea what they spent that money on. The biggest thing he will leave to his kids is a mortgage.

 

[eliza61]

Other than taking enough equity out to cover the refi costs, I agree. Never ever take equity out of your house.
As I have posted before, my neighbor has been in his house 30 years, and owes more today than he paid for it because he and his wife always took any equity out. Sad thing is, after his wife passed away a few years ago, he said he has no idea what they spent that money on. The biggest thing he will leave to his kids is a mortgage.

wait, why would his kids get his debt? Kids don't inherit debt. lol heck, I didn't have to pay my dh's credit card debt when he died.

I agree on not taking equity out of the house although we got a heloc when we redid our kitchen but that definitely didn't exceed the value of the house. but if your neighbor dies with a mortgage. house goes into an estate, bank takes the house sells it and mortgage is done. whether or not they get the full value. of course they kids don't get a house but it wasn't theirs in the first place

Sorry OT, was just curious

 

[supersnoop]

wait, why would his kids get his debt? Kids don't inherit debt. lol heck, I didn't have to pay my dh's credit card debt when he died. I agree on not taking equity out of the house although we got a heloc when we redid our kitchen but that definitely didn't exceed the value of the house. but if your neighbor dies with a mortgage. house goes into an estate, bank takes the house sells it and mortgage is done. whether or not they get the full value. of course they kids don't get a house but it wasn't theirs in the first place Sorry OT, was just curious

A mortgage is secured debt. Generally speaking, only funeral expenses and legal fees can be paid out of the estate before settling other debts. Basically, the kids wouldn't be on the hook for the mortgage, but the estate can't distribute anything of value until all debts are settled.

 

[eliza61]

A mortgage is secured debt. Generally speaking, only funeral expenses and legal fees can be paid out of the estate before settling other debts. Basically, the kids wouldn't be on the hook for the mortgage, but the estate can't distribute anything of value until all debts are settled.

ok, that's what I thought. The kids wouldn't get the house but they wouldn't get the debt either.
During my house search the seemed to take forever. lol, one of the houses I was seriously considering was a short sale from the bank. The parents died and the kids where all grown with their own lives so they simply left the house to the probate.

 

[tvguy]

ok, that's what I thought. The kids wouldn't get the house but they wouldn't get the debt either.
During my house search the seemed to take forever. lol, one of the houses I was seriously considering was a short sale from the bank. The parents died and the kids where all grown with their own lives so they simply left the house to the probate.

Not knowing how his will and estate are set up, I guess we don't know. But what he is leaving his heirs is a house with debt that will have to be paid somehow by the estate before anyone gets a penny.

 

[tvguy]

. lol heck, I didn't have to pay my dh's credit card debt when he died.

Interesting. Not sure how that's possible, but I live in a community property (and thus community debt) state. My mom had a devil of a time, when, 30 years after my dad died, she tried to get her name on the gas bill. They said she had no credit history with them and they wanted a $500 deposit. She finally got them a month later.....after sending a death certificate, and pointing out she had been making the payments for 30 years on the account, got the deposit requirement dropped and the account in her name.

 

[MillauFr]

Other than taking enough equity out to cover the refi costs, I agree. Never ever take equity out of your house.
As I have posted before, my neighbor has been in his house 30 years, and owes more today than he paid for it because he and his wife always took any equity out. Sad thing is, after his wife passed away a few years ago, he said he has no idea what they spent that money on. The biggest thing he will leave to his kids is a mortgage.

Depends what you spend the cash on. Blow it on a vacation or car then sure I agree with you. I took $40k in cash when I refinanced for home improvements. I only extended the life of the loan by a year and ended up making the same payment so it seemed like a good deal to me.