mortgage refinancing right for us?

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I have a 1.30% negative am loan, I need to leave, so I must now 650,000.00 on my first and my second, my question is, if I can get a loan, not a negative am loan and my payments are 2450.00, including my taxes? Even if I must be able to take only the interest on the loan itself of the first 3-5 years or more, while my wife and I would be better off financially and can refinance into something fixed. My house is worth about 750,000, so I do little more equal, and they had a negative am loan is about 2 1 / 2 years. I have been borrowed by the tree and put a mortgage calculator and information, and it highlights the different scenarios, and we did not pay 2450.00 Is it realistic? I pay property tax 8200.00 one year.

  1. Reply
    Mary B
    January 20, 2011 at 6:42 am

    If you can’t afford a fixed rate now, then go ahead and sell the home because you won’t be able to afford one later.

    The closing costs for that size loan is extremely expensive, and all you are going to do is chip away at your equity, refinancing to an interest only now (which will be a bad deal for you right now), and then turn around and refinance again later?

    If you can’t afford to go to a fixed rate mortage NOW, then you cannot afford the home at all.


  2. Reply
    Serge M
    January 20, 2011 at 6:49 am

    Assuming you are correct about the value of your home, you should be able to obtain a mortgage for 80 percent of the value, which would be only $ 600,000. However, if you need $ 650,000 you may have to pay mortgage insurance. which should increase your monthly payments. Also we should assume that your property tax has to be included with your monthly payment. Now let’s look at some numbers:

    A 650,000 30-year 6 percent fixed rate mortgage will have monthly payment of $ 3,897. Should you be lucky enough to get a 5 percent loan, the payment would be $ 3,489. These payments do not include property tax. These numbers include principal and interest. A 5 percent interest only loan would have interest of $ 2,665 per month not including property tax. Therefore it is impossible for you to refinance your house at the terms you want.

    It appears that a possible solution is to sell your house and buy a house that you can afford. Assuming a 5% 30 year standard mortgage with payments of $ 2,450, the initial loan balance would be $ 461,000. If the payment includes tax and we assume that the tax is $ 450 per month on a smaller house, the mortgage payment of $ 2,000 would be for a loan of $ 376,000.

  3. Reply
    Auntie Mame
    January 20, 2011 at 7:38 am

    You only want to pay $ 29,400 per year including taxes of $ 8,200, leaving $ 21,200 per year. The problem is that the interest on a 6.5% loan of $ 650,000 is $ 42,250 per year! Thus, the lowest possible payment for interest and taxes would be $ 4,204.17 per month.

  4. Reply
    Max M
    January 20, 2011 at 8:04 am

    An interest only payment of $ 2450 on a $ 650,000 mortgage would be generated by an interest rate of 4.5%. That is not currently available on a 3 or 5 year I/O loan, not without paying a few points. That rate is probably available on a 1 year fixed. If you would like a no-cost assessment of your current mortgage and refinance options, I can provide that for you. I am a licensed mortgage lender.

  5. Reply
    Jiji M
    January 20, 2011 at 8:48 am

    If you really can’t make the payments for a 5yr ARM Interest Only of about $ 3,365 + net wages and toy. Then you’ll need to sell the home and get into something affordable, or refinance into another Option ARM with a 5yr fixed margin, I credit your currently Option ARM is rising at a monthly rate. If you really need more time before say nothing credit is damaged, I think the winner bet will be another Option ARM but enamored a FIXED MARGIN..

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