Refinance my home, is it worth it?

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I’ve been living in my home for 3 years now, we took out a 2nd mortgage. Hour home loan was financed at 6.25, our 2nd mortgage at 7 3/8. I don’t want any money taken out i just want to refinance, put my 2 loans into one and get a better rate with the 2nd. Is it worth it or not? I seen that countrywide is doing a no cost refi and am thinking about it.

  1. Reply
    C F
    May 2, 2011 at 2:08 am

    I don’t really know, but I work for a mortage company and I could have someone email if interested.

  2. Reply
    Credit Expert
    May 2, 2011 at 2:10 am

    It could be worth it, but you have to do the math though. You just don’t want to end up upside down on it though.

    Get an appriasal
    Get a Good Faith Estimate from Countrywide to check for points or other hidden costs.
    If the new loan is less than your appraised value, and your payments will be less then yeah it may be worth it.

    Get set up on an accelerated pay plan where you make a 1/2 payment twice a month. Also send in a seperate check for the next month’s pricipal payment. That will help you make up lost ground on you refi’s, and help you to pay off the mortgage sooner.

  3. Reply
    May 2, 2011 at 2:34 am

    There’s a couple things you need to consider before making that decision and here they are (in a nutshell):

    1. Is the payment of the proposed refinance going to be lower than the combined of the current two mortgages?
    2. Is your goal to stay in this loan for at least 10 years? If so, ensure that the program you choose is something that will pay down principal over that course. If you are planning to move or refinance in less than five, you’re better off keeping what you have because to recover the costs of refinancing will take anywhere from 4 to 7 years depending on closing costs.
    3. Is the new loan amount going to be 80% or less of the appraised value of the home?
    4. Regarding Countrywide, make sure you look at the rate and program they are offering, in addition to the good faith estimate. They usually make up for their “no cost” refinance somewhere else – LIKE IN INTEREST RATE (they’ll raise your rate to make money “on the back end”).
    5. Have your loan officer give you a report that will show you what the net cost of the proposed loan will be and how long it will take you to “break even”. If you refinance or move before that breakeven point, the refi was a waste of money.

    Bottom line is, depending on what your plans are with the house (whether you’ll stay or possibly move in a couple days) will really predict whether you should refinance or not. If you’re staying for a long time, I would ensure to get a 5.875% or 5.75% 30 year fixed (that’s if your loan to value is under 80% and your credit is great! oh, and you have income, of course). I’m a personal mortgage consultant and a member of the national association of responsible loan officers. These are the rates I’m able to give my clients right now.

    Also, have your loan officer compile that report I touched on earlier. It’s an invaluable tool in helping you decide whether refinancing is right for you!

    Browse through my website below if you need more information (sorry, it’s still in it’s “development” phase so excuse the poor graphics!).

    And feel free to email me (contact info in site) with any thing else! I’d love to help!

  4. Reply
    May 2, 2011 at 2:58 am

    there isn’t enough information. In order to analyze your situation, I’d need to know what type of work you do, what is your monthly income, and how long you are planning to stay in this house. I can tell you for sure, that if you have high monthly income, and can afford a payment on a 15 year schedule, you will save thousands on the interest. Contact me if you would like a detailed consultation:

  5. Reply
    May 2, 2011 at 3:15 am

    Before discussing any type of mortgage loan, one must have a basic understanding of the concept of interest. Interest is the amount the borrower agrees to pay the lender over time as the price for the use of the lender’s money. Almost all loans made on real estate are computed at a simple rate of interest. I=PxRxT
    I= the amount of interest paid P= the principal R= the annual rate of interest charged T = the time money is borrowed.

    Amortization is a process of loan repayment in which the borrower makes periodic payments that cover all of the interest due and part of the principal. By the end of the loan both will have been paid off.
    Example. $ 125,000 @ 8.5% for 30 years. The first amortized payment will be $ 964.14 The first interest payment is calculated like this.
    I=$ 125,000 x .085 x 1/12= $ 885.42 For the first monthly payment is calculated by subtracting the interest payment from the total payment.
    Principal Payment= $ 961.14-$ 885.42=$ 75.42 Next, calculate the 2nd month’s principal payment ($ 75.72) from the original principal balance for the 2nd payment ($ 125,000-$ 75.72)=$ 124,924.28) Then the calculation of the 2nd month’s interest is : I=$ 124,924.28x.085×1/12=$ 884.88

    For your reference, here’s an example of how the formula works:
    Scenario: Calculations:
    80% LTV First Mortgage
    W1= 80 / 100 100% CLTVW1= 0.80 6.25% First Mortgage Rate 7.38% Second Mortgage RateW2= (100 – 80 ) / 100 W2= 20 / 100 W2= 0.20
    Blended Rate = ((0.80 x 6.25%) + (0.20 x 7.38%)) Blended Rate =6.476%

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