offTrack
New Member
Cash: $ 1.00
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Joined: 31 Dec 2012
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| Refinance advice |
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I have been in my home about 6 years. First mortgage is about 6.5 percent I got a second mortgage at %9.9 at same time from a mortgage broker because it would allow me to put down more and avoid mortgage insurance. I paid of the second mortgage which reduced my mortgage from $1100 to $1000. I got a letter a right after I paid off second mortgage that my mortgage will go up by 120 a month. Still haven't figured that one out. Now I am thinking of refinancing due to a $75,000 credit debt which just keeps piling up. I have been advised to get a 15 year loan. Will that double our monthly payments? That I can't afford. I have been advised to go to credit unions. One doesn't do loans and the SECU will not let us join. Income is about $70,000 a year. My mortgage broker I have used in past said he could not help because of a few missed payments recently. Should I try another MB or not? I hate dealing with big banks and have been advised not to but Wells Fargo has set everything up at 3.5 percent and $2000 origination fee. Should I take it? I would like to go to another bank and try to get a better deal but am afraid the maybe this was set up just before I miss a payment so it didn't get reported and it will blow the deal? What advice can someone give me.
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Mon Dec 31, 2012 5:59 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
I hate dealing with big banks and have been advised not to but Wells Fargo has set everything up at 3.5 percent and $2000 origination fee. Should I take it? I would like to go to another bank and try to get a better deal but am afraid the maybe this was set up just before I miss a payment so it didn't get reported and it will blow the deal? What advice can someone give me.
You may dislike big banks - but that is where the money is (your MB doesn't have money to lend, he locates banks for you.)
As for taking a deal that was set up before you missed payments, that won't work, pretty hard to trick a bank - they do another "discovery" process before the final papers are signed and the loan will be based on your current status (right up thru yesterday).
Personally, I would get a 30-year fixed rate loan - they are under 4% now, a lifetime low for most of us - and I would take the maximum up to 80% of the house (or more if they will give it to you).
And then apply any cash from the refi to your high-interest cc loans. Plus the lower house payment (due to the refi) allows you to pay more on your cc loans.
For comparison, a $175,000 loan at 4% for 30 years is $835/m. At 3.5% for 15 years it is $1251/m. I would take the $835/m loan and use the extra $416/m to pay down the expensive cc loans. ($416/m is almost $5000/yr, that will cut down the $75,000 loan much faster).
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Mon Dec 31, 2012 2:37 pm |
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johnmarry123
New Poster
Cash: $ 0.40
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Joined: 05 Jan 2013
Location: lahore
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i'll try to make a long story short. A little background first, both my husband and I had execellent credit then we moved and messed up
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Sat Jan 05, 2013 3:06 am |
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autoglass020
New Member
Cash: $ 0.60
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Joined: 08 Jan 2013
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Can you use your 401 k to pay down your mortgage if you refinance without receiving a penalty?
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Tue Jan 08, 2013 11:59 am |
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clydewolf
Senior Member
Cash: $ 50.25
Posts: 248
Joined: 27 May 2012
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| Re: Refinance advice |
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quote:
Originally posted by offTrack
I have been in my home about 6 years. First mortgage is about 6.5 percent I got a second mortgage at %9.9 at same time from a mortgage broker because it would allow me to put down more and avoid mortgage insurance. I paid of the second mortgage which reduced my mortgage from $1100 to $1000. I got a letter a right after I paid off second mortgage that my mortgage will go up by 120 a month. Still haven't figured that one out. Now I am thinking of refinancing due to a $75,000 credit debt which just keeps piling up. I have been advised to get a 15 year loan. Will that double our monthly payments? That I can't afford. I have been advised to go to credit unions. One doesn't do loans and the SECU will not let us join. Income is about $70,000 a year. My mortgage broker I have used in past said he could not help because of a few missed payments recently. Should I try another MB or not? I hate dealing with big banks and have been advised not to but Wells Fargo has set everything up at 3.5 percent and $2000 origination fee. Should I take it? I would like to go to another bank and try to get a better deal but am afraid the maybe this was set up just before I miss a payment so it didn't get reported and it will blow the deal? What advice can someone give me.
Listen to Oldguy, get a 30 year mortgage. While the 15 year mortgage has a lower rate and will save thousands in interest, the 30 year mortgage has an easier payment should things become tighter. If you can afford to pay extra on the principal at some time then do that. Paying extra on the principal will also reduce the amount of interest you pay.
Stop using the CC and keep paying at least the minimum payment on time each month. Why not round that minimum payment up to the next dollar? No big savings there but it can help.
And before you plunk a big chunk of money on your CC debt, why not set aside 6 months of living expenses. That way you have a better opportunity to pay your CC debt, and keep your head above the water.
It is often fun to create that CC debt, but it is no fun eliminating that debt.
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Tue Jan 08, 2013 11:32 pm |
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