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Mortgage Refinancing: When Not To consider It

Whenever the actual rates are low, homeowners often find out question: \”Should I refinance?Inch

While low rates tend to be tempting and may be described as a good indication that mortgage refinancing is a good idea, that doesn’t mean it may apply to all. Odd as it may seem, a lot of homeowners will be better off sticking to their present loan and ignore the current low rates.

That said, there are specific situations when replacing doesn’t make sense at all. Let us take a look at these scenarios:

When you don’t plan to live in your property for long

This is really one thing you should heavily take into account. A lot of homeowners think that refinancing is a good option whenever the charges are low. The reality is, there are certain fees involved in mortgage refinancing that could only be recouped by staying in your property for a particular period of time (called the ‘break-even period\”) which can take several years. Hence, if you think that you will be promoting your house a few years through now, mortgage refinancing is probably not for you.

When the market value of your property is low

Obviously, commemorate no sense in order to refinance your mortgage if the amount of brand new loan is not sufficient enough to pay for the existing a single. In the same manner, if the estimated value of your property will be low, your monthly payment for the new loan could be higher than your current loan.

When you’re paying for your loan for quite some time

Say you are on the particular tenth or twentieth of payment on the 30-year loan. Refinancing it to a different 30 years will only boost the overall cost of your loan.

If you have a few years left in your loan

Even if you’re in dire need of cash, that not a good idea to remortgage your home with just a few years left in it. Extending your payment terms will drive you to pay more. For example, you have 5 years left on your home loan and you apply associated with refinancing which will extend it to 10 a lot more years (15 years loan), the total cost of the new loan may well be more than what you should purchase the 5 remaining years even if the monthly payment are significantly lower.

Once you don’t know how to budget your cash well

It’s a common strategy to use refinancing to pay for credit card bills. Even though this may be a wise choice for some, others who can’t manage their financial situation well may find it satisfying at first but very painful in the end. Not only will you place your house on the line, you are also inserting youre your whole financial standing at risk. (Take note: re-financing doesn’t erase your own credit, you are just restructuring that.)

When you have already used up all the equity of your property

One factor that will certainly greatly influence the rates of your new loan is the amount of equity you have in your home. If you have already lent ninety percent of you more of your equity, itrrrs likely that, you are just incorporating on your financial load and not really taking advantage of the advantages of refinancing.

If you have a bad credit score

Aside from equity, your credit rating is a significant calculate whether you get a good rate or not. So if you have missed repayments and pilled up credit card expenses, you may not be qualified to a better rate.

Comments: 59

  1. Damion February 20, 2013 at 12:50 am Reply

    I’m planning to relocate, but current owe a mortgage for $50k. I also have a bankruptcy on my record thats a couple of years old. I’d like to find new home in the state I choose to live in. Would I be able to get a second mortgage or refinance my current home in order to pay for a new one?

  2. Osvaldo March 7, 2013 at 11:17 am Reply

    Is the mortgage refinancing market a strong or weak right now? Fill me in on your thoughts. If you could, please tell me if you are in mortgage refinancing business or not. Thanks , The more responses the better.

  3. Bernard March 17, 2013 at 7:28 am Reply

    current house payment is 650. What’s better financially, paying an extra 500 per month on our 30 year mortgage or refinancing to a 10 year mortgage and paying 1150 per month? We are 3 years into our 30 year mortgage.
    the 30 year has 5.75%… and i used current rates for the 10 year.

  4. Monet April 11, 2013 at 1:26 am Reply

    home loan modification vs mortgage refinancing, are they the same thing?

  5. Lashaunda April 26, 2013 at 7:13 pm Reply

    I am working with my original lender to refinance my house, but I’m curious as to what advantages I have of looking somewhere else. Can the rates be lower from one lender to another or does the market pretty much make it the same for all?

  6. Son May 14, 2013 at 6:46 am Reply

    I have a part time job in telemarketing in mortgage refinance. The script I have are very cheesy. Can someone please share a better script for me please? Something that will interest the customers. I do cold calls and warm market. Other information on techniques or strategies will be greatly appreciate also.

    Need money to feed a hungry baby..

  7. Ardath June 21, 2013 at 2:38 am Reply

    I have a high credit score (760), and was approved for my bank’s best rate. The refinancing process is taking awhile, and I would like to get a better rewards card than what I have. Would it be a bad idea to apply for a new credit card before the refinancing closes?

  8. Nickolas June 25, 2013 at 8:19 pm Reply

    I have a high interest rate mortgage, but I am current on it. I owe about 90% of the value. Since the gov’t is offering a mortgage refinance plan to lower the rates, maybe I should not make payments for 90 days?

  9. Gertha June 25, 2013 at 8:43 pm Reply

    Where can I find the lowest interest rate for a mortgage refinance in Arizona? I would like to be able to look for it online.

  10. Erasmo June 25, 2013 at 8:56 pm Reply

    My brother helped me buying the house off. Now I need to finance the house to pay him back. Will this be considered a new mortgage, a refinancing or an equity loan (since they have different interest rates…)

  11. Julieta July 28, 2013 at 9:18 pm Reply

    I am a soon to be college grad that is currently interviewing with Wells Fargo to become a Credit Manager in the Chicago land area. Is the mortgage refinancing market a strong place to start a career right now? Fill me in on your thoughts. If you could, please tell me if you are in mortgage refinancing business or not. Thanks , The more responses the better.

  12. Irving December 23, 2013 at 7:52 am Reply

    If I want to get 2 or 3 offers for a mortgage refinance, do I have to get 2 or 3 appraisals? Or can I get just one, and use that for all 3 banks?

  13. Sophie February 2, 2014 at 6:35 am Reply

    I’m two years into a 5 year ARM with an interest rate of 4.375%. I’m worried that interest rates will just keep climbing and that I’ll suffer for it in the long run if I don’t refinance. I do have a 2% cap per year after the fifth year. The rate could get to above 11% total if I don’t refinance. However, I just cringe at the thought of refinancing at a HIGHER rate, even though it may be better in the long run.
    Just to clarify, the ARM is fixed for 5 years (but can go up 2% a year after that) and I’m considering refinancing into a 30-year fixed loan, even though the rate will be higher.

  14. Jordon February 6, 2014 at 1:34 am Reply

    I come to you in search of an answer as my banker seems is being very vague and untimely in getting me answer to my questions. My wife and I recently locked in our 30 year mortgage rate of 6.025%. With the rates dropping lower and lower we asked our banker if we could refinance at a lower rate (near 5%). She basically told us it would cost us more in the long run. I can’t figure out how she came to that. Assuming that rate deduction knocks off, say $120, a month (normally we pay about $1,625/mth); how would we end up paying more over 30 years? This is assuming we’ll still be paying about $1,600/mth that we budget for? Let me know guys…my bank recently pulled their ‘mortgage rate tracker’ from their site; which is adding to an already huge complaint list about my lender.
    -We built a new house and were under the ‘construction window’ until this past June when we locked into our 6.025% rate.
    -We’ve been living their for less than 2 years.
    -The banker spoke to my wife today (I’ll add as much as she remembers:
    -We are in a new credit ‘bracket’ with the bank…something they just started to do, apparently in the past couple months. She said the bank added these brackets after some mortgagees(sp?) could not complete payments…they’re stricter on their loans (we’ve been making payments on-time, plus extra to the principle).
    -She said the banker told her we have a different loan to house value (?) than we did when we transfered over from construction.
    -Right now (banker said) they’re only going as low as 6.3%, but she estimates with Obama’s new plan, if invoked, would drop the rate in our ‘bracket’ enormously.
    -We plan on retiring and living in the house the rest of our lives(60+ years)
    -Any suggestions on where to go?

  15. Raymond February 8, 2014 at 12:51 pm Reply

    Hi I have a mortgate of around 2 years old and is a 30 year fixed rate at 6.5%. With interest rates being slashed right now and house prices dwindling it would make a lot of sense to be able to refinance the mortgage at a much reduced rate, lower the monthly premium but still pay (ie overpay) the same amount each month to the mortgage company thereby paying of the principle faster and possibly ending up in a few years time with some equity back in the home. If I leave it as is the market is going down as fast as I’m paying off the principle and am therefore no close to actually owning my home. The other alternative to over paying is refinancing at a 15 year fixed rate loan as that seems to be giving me around the same monthly payment as I’m paying out now.
    But the question is, with no equity in the house will my current (or even another) mortgage lender even look twice at refinancing (I understand that lenders are reluctant to give out loan to value ratios of higher than 70-80%)

  16. Carman February 21, 2014 at 7:55 am Reply

    Hi All,
    I have a 5 yrs term mortgage that I got 2 years ago for a 4-plex I purchased. Last month I contacted an appraiser who appraised the property. Based on the appraisal the property is worth around 100K more than purchased. This means I can apply for refinancing and potentially take out some equity from the house.

    The mortgage is with excellent conditions – good interest. I got it through a mortgage broker with a big bank in Canada.
    I have 2 options for the purpose of refinancing: either contact the bank who provided the mortgage directly OR apply through a mortgage broker who can decide to work with different banks.
    The problem with going with a mortgage broker is that he already told me the new conditions will be worse than current conditions I have. If the current bank approved my refinancing application it would be with the same or better conditions! On the other hand, if I go with the current bank am I not taking a RISK THAT IF THEY DO NOT AGREE to refinance the property because I do not meet their criterias (I am self employed now), then they will also NOT automatically renew my mortgage in 3 years when term is over!? Note: if I do not contact them now, then my understanding is that the bank will automatically renew my mortgage since that is the law in Canada: as long as you pay all your mortgage payments on time, the mortgage is renewed automatically without the need to re-apply/go through the application process again!
    I’m just not sure if I contact them now for refinancing and fail, that they will not keep record of my new ‘bad’ information (i.e. self employed, less stable, etc. whatever caused them not to approve me) and NOT automatically renew my mortgage when the term is over!



  17. Ned February 21, 2014 at 9:42 pm Reply

    Our current 30-year mortgage is at 5.25% but I think we could get it down below 5%. We’re about 5 years into this 30-year mortgage and haven’t missed a payment (and don’t expect to). Here are my questions:
    A) Even if we got a loan down to under 5%, would it be appreciably different over the long-term from a financial standpoint?
    B) Are banks in existence that would allow a couple to refinance and pay zero fees? Over the course of even 15 years, banks make a lot of money from interest… why charge someone a fee? I realize it’s not up to me.
    C) If we maintain our 30-year mortgage… say we don’t wind up refinancing… does it save a person/couple a lot if they were to pay one or two extra payments a year? Loan amount 200k, interest 5.25%.

    Any advice appreciated.
    First responder: no, that site didn’t help. Why would you waste that 10 seconds of my life FOR me? Idiot.

  18. Sherill February 22, 2014 at 7:06 am Reply

    Is it better to try and refinance with your current mortgage company or go out to another company and refinance? Does it really matter, will it be the same percentage rates anyways?

  19. Jayne February 22, 2014 at 7:06 am Reply

    Is there a cut off point dollar wise as to refinancing a mortgage? I”m currently around $64K with approximately 19 years left. Would like to refi to a lower rate on a 20 year term.

  20. Noah February 22, 2014 at 7:07 am Reply

    Why if banks have given a second chance to clean up their act and help us on their way, are not even attempting to do so.
    talking about mortgage refinance / adjustment.
    worked twice with my bank CHASE, submitting all required documents several times, because did not wanted to lose my house, could not afford the monthly payment of $1364, only $800 specially after losing my job, but the bank refused this, sadly at the end lost my house as thousands of other American hard working people.
    My question here is:
    Why this so called: Mortgage refinance / adjustment is not government regulated?
    Banks are NOT working with people trying to save their homes!
    to loanmasterone:
    Agree with you on the part that banks that were in trouble should have been allowed to fail as all the rest (well us people that is) It was and still is ridiculous to see how CEO’s get salary bonus, raise and other benefits, for what? Oh yes, forgot, for getting the president bailing them out with our tax money.
    Now, do not agree with your point of “the shoe on the other foot” is NOT like we, honest, hardworking people, trying to save our home and stay above water are taking advantage of anything. Simply trying to work things out with the bank so:
    – we could save our home
    – still pay all interest and mortgage (reduced that is) naturally length of time will increase.
    – save the bank money! Because once the house is gone into foreclosure, property’ s value decrease, especially if the family remains living there and the house is not well kept.
    – If the house is empty and is winter time, well start counting the damages there.

    The point here is, banks got bailed out! how

  21. Lester March 9, 2014 at 6:31 am Reply

    I bought a house with a friend of mine as co-borrower two years ago. I got married recently and want to take over the house and the mortgage. The house has two mortgages when it was purchased at 100% financing at that time. Rates are good. I called up the lending bank who holds both mortgages and they said I can assume the first mortgage but the second mortgage is not assumable. I have to refinance for the second mortgage.

    Another option would be to refinance altogether and combine the two mortgages into one under my name. But since the house was purchased almost two years ago, there has not been that much equity so in order to refinance I have to put down a lot of money. The bank can only finance 95%LTV.

    If I go with refinancing with the second mortgage, the bank will need 85%LTV maximum.

    Not sure what to do. What do you think?
    Thanks Christopher B.! But what is the Power of Attorney for?
    The first mortgage is a 30 year fixed, with 6.5% interest. The second mortgage is a 30 year fixed with 7.9% interest.
    My buddy got married too and intends to buy a house in a year or so. Hence the need to take him off the mortgage.

  22. Arletha March 15, 2014 at 1:12 am Reply

    based off of the most common outlook for the housing and financial markets, are mortgage and refinance rates going to decrease?

  23. Willard March 16, 2014 at 1:13 am Reply

    I bought several houses in my time and therefore thought I was an “expert” on getting a good mortgage. Now I’m looking for a straight answer on the best refinance rate, and a mortgage broker says pricing on loans includes factors that “were not there even one year ago”, such as: FICO score, loan to value, loan amount, occupancy, etc.” Can a mortgage rate vary according to my FICO score (or would I just be rejected if my score is too low)? What’s going on? Why is it so hard to get a mortgage rate out of a broker or a web site?

    btw, I have great credit, 80% equity, live in the house, and want to re-fi $117k, in NC.

  24. Cristobal March 17, 2014 at 11:00 am Reply

    Where is a site that is simplified in answers regarding mortgages, loan companies, interest & everything else.
    Every time Hubby gets a letter offering to refinance us
    & lower our monthly payments,
    & skip a mortgage payment, plus return our escrow
    I smell a fish & Hubby sees a great! opportunity to save a few bucks so,…
    Where is a site, with simple explanations, that can answer any questions about mortgages.

    (For example: Just how well is Countrywide doing? Do we want to get away from them? Are they about to sell our note to a Mexican bank & we’ll start having to pay in Pesos?)

    So do you know of a site that can answer mortgage questions in an easy to understand way?
    Thank you,
    Harry Gams

  25. Carlton March 17, 2014 at 11:00 am Reply

    Is there anyone out there that knows about refinanacing a second mortgage? Being a first time homebuyer we were duped into taking out a 13.5% second mortgage on our home. I cant find any info on refinancing this type of loan besides companies who cant be trusted. Any info would help.
    to the smarty pants who wants to make comments about what i can can’t afford. you dont know what I can or can’t afford. the reality it my husband and i prob make more than the two of you combined! But it doesnt matter how much money you make if your credit score is low because we pay mostly with cash! And the way the loan was explained to us was NOT the way it turned out to be.

  26. Stewart March 17, 2014 at 2:07 pm Reply

    I’m trying to get my stepmom to refinance but she said her co worker and some other people told her that when they tried to refinance, they went to banks but they all said that “Sure you can refinance but you have to come back in five years and do it all over again and pay refinancing charges/closingcosts/etc fees”.

    I’m thinking they were telling my stepmom about ARM rates or something to the likes of that. But FIXED rates are guaranteed Locked-In, right? Unchangeable, right?

  27. Rodger March 18, 2014 at 2:42 am Reply

    I need to know if this a good time to refinance an existing home mortgage. I purchased a home in san antonio in may 2009 at 6%. What are the best banks who would offer me low refinancing rates?

  28. Clorinda March 18, 2014 at 8:07 am Reply

    John and Jane each own 50% of a piece of property. That property has a mortgage. About 10 years go by and John is now taking all the responsibility for taking care of the property; other than being listed on the deed, Jane is not involved at all. John refinances the mortgage without Jane’s participation. Is Jane liable for that new mortgage? Or is Jane’s financial responsibility basically paid off when the first mortgage was paid off by the refinance? Or could Jane have been put on the new mortgage without her knowledge or consent?

  29. Bertram March 19, 2014 at 3:19 pm Reply

    Are refinancing and mortgage rates different? Also, is refinancing closing cost higher than mortgage closing when buying new home. I bought a home 10yrs-Fixed-ARM in June’07 at 6.25 and now the rates are 5.75. I will save $200 per-month if I get 5.75. Should I refinance? Advise please. I have good credit.

  30. Lorie March 21, 2014 at 1:22 am Reply

    I’ve heard from a friend that Obama came up with a new plan, anyone know what that is or about? Whats the right way to go to lower my payments without having to refinance? Thanks

  31. Willard March 31, 2014 at 6:18 am Reply

    We have lived in our house for 3.5 years and plan to purchase a new home in 1.5-2 years. Our mortgage is 6.25 30 year fixed. We took on a 2nd mortgage about a year ago to pay off debt. Now we want to refinance and roll the two together with our existing car loans and credit card, so we can fix any credit problems, make payments easily, etc. so it will be easier to buy the next house. The new rate being offerred is 6.95%. Our mortgage payments will be $400 more, but we will be saving an additional $400 in monthly payments. We figure our credit will improve greatly. We were worried about paying down a credit card “over 30 years”, but the refinancing co. reasoned that we will only have this “bigger” mortgage payment and interest rate for the next couple of years; it’s the mortgage for the new house we need to be concerned about. (And by doing this, we will improve our credit and chances for a better mortgage next time.)

    Hope that’s enough info. for detailed info on pitfalls of refi.
    Thanks for the replies so far. Here’s more info:

    Mortgage: 180K
    2nd: 30K 15 year fixed at 9%
    Credit cards: 8K at 21%
    Auto loan: 7K at 8%
    Home value: approx. $255K (conservative).
    Mortgage payments + current loans = 2400/month.
    Refi payment would be 2000, incl. closing costs, taxes, insurance, etc.

    We could pay off credit cards by the time we want to move, using bonuses, etc. but right now it is hard to make payments on time.

    P.S. I can’t do the math figuring the percentages over time, etc. I am just awful at it and my head is already spinning!

  32. Dino March 31, 2014 at 9:14 pm Reply

    is this a bad thing to do? how long should you wait before refinancing? and how does it lower your payment?

  33. Bruno April 4, 2014 at 12:38 am Reply

    my spouse is in process of refinancing on home. My credit score is slightly below to receive a certain rate. If he still does refinance and when my credit score goes up slightly can I be added to new mortgage? Can this be acheived without changing the percentage rate he locked in at?

  34. Scarlett April 5, 2014 at 8:03 am Reply

    Hello all,
    i ‘d like to know how to best use mortgage refinance, and usually for what reasons people refinance. Also does refinance ultimately cost more? I don’t need to lower my monthly payment, so I don’t have any clear purpose in mind. It is just that I have heard a lot of different views on refinance. I hope to get some insights and analysis from you out there. Thank you.

  35. Brett April 5, 2014 at 9:42 am Reply

    When you refinance your home with another mortgage company then the one you have know, who lets them know you’ve gone with another mortgage company? Are there penelties? We are in a sliding rate and are trying to get into a fixed rate. thanks!

  36. Morgan April 5, 2014 at 4:14 pm Reply

    I have a mortgage and a second mortgage with the same lender. The two of them put together put me upside down on my home, so refinancing both wouldn’t happen.

    The question is, to take advantage of today’s good rates, can I just refinance the second mortgage since it’s considerably less than the worth of my home? Are there any mortgage rules or anything else that would prevent me from doing so?

  37. Orval April 10, 2014 at 8:39 am Reply

    Fico Scores range from 585-621. Self employed, bankruptcy within past year. Don’t care about interest rates. Honest, kind answers only, please.

  38. Giuseppe April 11, 2014 at 10:17 am Reply

    I am trying to refinance my existing home loan, plus a 2nd mortgage as well as a number of other loans, cards etc. I do have 2 defaults on my file, one paid and one unpaid. Has anyone been in a similar situation and how did they refinance

  39. Charlyn April 12, 2014 at 3:08 am Reply

    I lost my job and was out of work for seven months. I got behind on my mortage payments and am on a pay plan at the bank.
    Will they let me refinance? I only owned the home for about two years?
    What is reconfirming your loan mean? Please help!

  40. Giuseppe April 13, 2014 at 6:25 am Reply

    My mortgage payment is currently 4200 per month. I have two loans, one at 9.75 for 15 years and another at 6.75 for 30 years. I purchased my home in October 2006 (I know, I should’ve waited) and would like to refinance to make my mortgage payments more manageable. Can I refinance so early into my mortgage? Any ideas or suggestions would be greatly appreciated.

  41. Britt April 14, 2014 at 7:32 am Reply

    im in financial problems these days. My friend
    told me to refinance my house mortgage. please
    tell me what is it? what is the way to refinance
    my home mortgage?

  42. Mavis April 17, 2014 at 5:24 pm Reply

    I am running into some hard times and want to refinance my mortgage is this the best way to save some money or should I wait I have only had my house for a year and need to save money somewhere any suggestions

  43. Randolph April 20, 2014 at 8:32 am Reply

    We bought our house 3 years ago with an interest only 80/20 5 year arm loan. We of course like many others are upside down by about $30,000. I have recently contacted Wells Fargo (our mortgage company) and they are saying that we can not refinance and really have no options at this time. This can’t be right? I thought there were programs made for just these problems? Can it be we’re really just stuck?
    Possibly buy a second home and walk away from the first?
    As of note, I am not in any danger of losing my house, or defaulting on the loan. Our credit scores are both in the 700s, our income is above 150K. We did not buy a house we could not afford either. We have over a 100K in savings but to throw 30K to counter the loss just sucks and I was wondering if there was another way around this, how can this be?

  44. Ed April 20, 2014 at 9:54 pm Reply

    Is there anyone who would know about this?.. and what do I need to do about acquiring this refinancing? any help would be appreciated
    First of all Ms Angie.. I am paying the taxes the lien was issued because I had sub par reprensentation.. when I was trying to the taxes PAID… so before you judge and shoot off at the mouth.., ask a few more questions

  45. Spencer April 25, 2014 at 11:04 pm Reply

    Is there any length of time for refinancing a home that you just purchased?

  46. Jeffry April 27, 2014 at 6:35 pm Reply

    when is it worth refinancing. i locked my 30 yr mortgage at 6.375 or 6.125 i have to look it up. it was a 157k loan. right now the rate is at 5.375 i think. the cost to refinance is $1300. the guy at the bank said that a good time to do it would be when the rate is at least 1% lower. he also said that i would make up the $1300 probably in the first year. any input on when to refinance would be great. thanks
    when is it worth refinancing. i locked my 30 yr mortgage at 6.375 or 6.125 i have to look it up. it was a 157k loan. right now the rate is at 5.375 i think. the cost to refinance is $1300. the guy at the bank said that a good time to do it would be when the rate is at least 1% lower. he also said that i would make up the $1300 probably in the first year. any input on when to refinance would be great. thanks

    I do all my banking at US Bank. I was told awhile ago that with each 1/8% rate deduction it’s about $5 less for the monthly payment.

    i wouldn’t be able to pay any fees out of pocket. they’d have to be added to the loan.

  47. Nolan April 28, 2014 at 10:40 pm Reply

    We are looking to combine our first and second mortgage on our home. current first approx. $80,000 current second approx $60,000 house value @ $165,000 would also like to have a little cusion in the bank. With less than perfect credit who is our best choice of lender

  48. Jere May 2, 2014 at 7:03 am Reply

    I have to opportunity to refinance my mortgage and cut my interest rate by 2% (7.5% to 5.5%), which will save me $350 a month. We have $265K left on a $271K loan. When all the closing costs ($3,900), insurance and escrow are rolled in, the cost comes to $281K. Are we making out on the deal or is this a bad decision? Side note: We are unsure of how long we will be living in the house. At LEAST the next 2-3 years.
    Additional Notes: The escrow payment is to replenish what is in there with the new escrow company. Lender says I will be receiving a check from my current escrow with essentially the same amount.

  49. Lillie May 3, 2014 at 1:32 am Reply

    need approval without government

  50. Wm May 3, 2014 at 3:18 pm Reply

    I am a US homeowner. Instead of refinancing, I wanted to explore the possibility of a reverse mortgage.All I have seen so far is that this is only good for homeowners aged 62 or more. Is there a company that provides reverse mortgages for those younger than 62?

  51. Guillermo May 7, 2014 at 4:04 pm Reply

    if you are going to refinance to a lower interest rate. how much lower should the rate be for it to be worth your while.currently 6.5

  52. Jolene May 13, 2014 at 1:19 pm Reply

    – Just for my own info.

  53. Erik May 14, 2014 at 2:30 am Reply

    I came across this question and have little idea has to how to structure it to solve the answers. Any help and comment will be greatly appreciated. Thank you 🙂

    Imagine you took out a mortgage in year 2000. The mortgage was for $600,000 (this is what they call a jumbo loan) at a 6% (fixed) interest rate for a 30 year loan. As you are no doubt aware, interest rates have fallen across the board and so have mortgage rates. Imagine this rate came down to 5% in 2010. Now, as always, we need to lay out an objective in answering the question. Let us stipulate that the objective of the individual is to minimize the sum total of interest payments. Answer the three questions below showing your calculations.
    1. Does it make sense for the individual to refinance (exactly 10 years after the initial mortgage was taken out)?

    2. What is the break-even interest rate? That is, at what interest rate would this individual be indifferent between refinancing and not refinancing?

    3. What other considerations might individuals take into account in the real world (other than minimizing interest payments)?

  54. Ross May 17, 2014 at 1:23 am Reply

    Would it be worth refinancing a home loan to get a lower rate? We could decrease the rate from 6.5 to 5.5 but it would add $12,000 to my current loan amount. It would remain a 30 year fixed. We’d also get to skip two months of payments (which is actually added into the loan, not really “skipped”); but it’s still money in hand. The current mortgage is less than a year old. Would the refinance be worth it?
    I forgot to say, there are no prepayment penalties. And the added money to the mortgage will make the mortgage more than the house is currently worth (though that may change eventually…hope I hope).

  55. Hung May 21, 2014 at 8:26 pm Reply

    I’ve heard from a friend that Obama came up with a new plan, anyone know what that is or about? Whats the right way to go to lower my payments without having to refinance? Thanks

  56. Melita May 28, 2014 at 8:49 am Reply

    Since the deed is in my name but the mortgage is still in the Sellers name, how do I refinance it

  57. Maria June 3, 2014 at 10:20 pm Reply

    Does anyone have any suggestion? Where to look, what to stay away from or tricks of the trade. Made a poor decision on our present mortgage and don’t want to do a repeat. Am locked in on present note for 45 more days and then we want OUT. Looking for 15, 20, or possibly 30 year fixed. Am not interested in doing business with Coutrywide. Thanks for your help.

  58. Domitila June 8, 2014 at 11:09 pm Reply

    I was in an accident and got behind on my mortgage. I was able to get countrywide to refinance my mortgage and roll my past due amount back into the note. A month after I refinanced I found out that my note was sold to bank of america. My new mortgage payment was suppose to take affect in May. BOA is not recognizing my refinance. They say that it may take up to 3 more months for them to approve the refinance. Now I’m worried that they are going to foreclose on my house. They are taking my payments but not cashing the checks. Is this legal for BOA not to recognize my refinance?

  59. Brigette June 22, 2014 at 2:15 am Reply

    A recent divorce forces the need to refinance my mortgage. I am considering the FHA streamline refinance loan but I am not sure of all the details. I need to know if I can borrow more then I currently owe on my existing mortgage with this program. I have some other debts that need to be paid off with the equity i have built up in the home.

    I purchased the home in 2009 for $110,000, still owe $107,000 (it was a HUD home and I had instant equity after closing).

    The home is actually worth about $140,000 – $145,000, so in theory; I have about $33,000 – $38,000 in equity.

    So my question is this: Can i borrow the full amount of what the house is actually worth or can i only borrow what I currently owe?

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