<p>I refinanced after 9/11 for 15 years at 5.85%. That rate was very low at the time.
I used my local bank but I think I could have done better. It looks like it is worth refinancing again even though I only have 7 or 8 years to go. I was thinking about looking into a 10 year?</p>
<p>you could just ask the bank if they will lower your rate…? We did it the long, hard, expensive way and did a cash out refi with BOA (which already owned our mortgage) and took out enough cash to pay for a home remodel. Got an adjustable 7/1ARM at 3.5%, but will pay it off within the 7 years. It ended up costing us the same as the 5.75% mortgage would have over those years, but with the benefit of financing our homeremodel without interest cost.</p>
<p>Does a 10 year even get you a lower rate than a 15 year? Seems like you could get a 15 year for less than 3%. If you have a very large mortgage, the best deal is PenFed, 3.625%, they pay most of the closing costs, no points. It’s an adjustable 5/5 ARM (when it adjusts, it adjusts for 5 years, at a very reasonable rate). But if you’re looking for a fixed, you should definitely refinance, as you can get some amazing deals out there with low costs.</p>
<p>In fact, with only 7-8 years to go, it might be worth getting a 5 year adjustable, and using the extra to pay it off if rates go up after 5 years. If your overall balance is low, you could get an extremely low rate.</p>
<p>Go for the 10 year, but make the same payment you have now. Or get a 5/1 or 5/5 adjustable if the initial rate is cheaper (at my credit union , the 10 year fixed has the lowest interest rate).</p>
<p>Assuming you are exactly 8 years in, you would pay the new mortgage off in 6.25 years instead of 7, assuming you get a 2.99% rate like my credit union is offering for 10 year fixed mortgages.</p>
<p>This saves you 9 months’ worth of payments, minus closing costs that will probably total around 2 months’ payments.</p>
<p>Not every bank will offer a 10 year, some also have minimums to get the lowest rates.</p>
<p>Another possibility to look into is getting a fixed-rate home equity loan (not a line of credit) which typically have zero application and closing costs, a much simpler application process, and a much faster approval time. Use the proceeds to pay off the first mortgage. My credit union is at 3% for a 5 year, and 4.25% for a 10 year.</p>
<p>The problem today everyone is facing is the appraisal of your home. In many cases, depends where you are located, your home’s value is lower than when you bought it 10 years ago, some times even 15 years ago. In otherwords, those equity(not the interest) you pay to the bank for the last 10 years are gone, as a result, it is hard to get a second mortgage to pay off the first mortgae. unless you have very little balance on your loan. </p>
<p>So, lets say you bought the house in year 2000 For $1 Million
Refinance the home at a value of $1.2 Million in 2002 @90%, now you have a mortgage of $1.08 million
over the years, you have paid down the mortgage to $750K
In 2011, your home is worth $800K
You cannot find a Home Equity Loan to pay off the mortgage. the most they can give you is Nothing, because the most they can loan you is lets say 80% of the $800K which is $640K, but you already have a mortgage of $750K.</p>
<p>Tell the bank who has your mortgage to lower the payment (aka Loan Modification) is another option.but since everyone and his brother has the same idea, banks are overwhelmed with the request. The banks have enough problems with defaulted loans, they don’t have time for those who are servicing (PAYING) the mortgage. We have several requests in Nevada and after one year of being put on hold, the cleint just did not want to wait any more.</p>
<p>sorry, its tough out ther.</p>
<p>IMHO</p>
<p>If all things failed, the only way to save money is to acclerate your principal payment by double your “principal payment”, you can add another $100, $500 or twice the total principal to your monthly payment and indicated that amount on your payment stub as additional paid in principal. It was estimated if you do the double principal method, you can reduce your 30 year mortgage to 15 years and save you $$$$$ of interest cost. as you know for each $100K outstanding balance at 6% interest rate, it will cost you $6,000 interest per year.</p>
<p>If you have good equity in the house (ie, the value hasn’t dropped a ton, you didn’t buy at peak) and you are employed, you should be able to refi for 3.5 or so for a 10 year. We just did. Second time in 6 months we refinanced (last time was at 4.25 I think), our lender is very stable–we’ve been w/ them years and closing costs only around $350 so well worth it.</p>
<p>We did have to have FULL appraisals both times, lots of documentation of income–wow, they are thorough nowadays. I remember banks doing ‘drive by’ appraisals back in the bad old days.</p>