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funhealth · Joined: 07 Sep 2007 Posts: 1 1.37 Dollars($)

We are thinking of refinancing and need a few more thinking caps to help us make sure we are making the best decision.

Our current info: 5 yr HELOC ARM (10.75%) and 30 yr conv. jumbo ARM (5.75%)? We've lived here 3.5 yrs.

We got a quote from our current lender to combine the 2: 30 yr fixed at 6.6%...$3,800 closing cost + $334 app fee.

Is it worth refinancing with the current market forecast? Is this competitive?

Thanks in advance!!

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

What is the margin and caps on the 30 yr jumbo arm? How long do you plan to stay in this house before relocating ?

With the arm you have risk that rates can go high and make it difficult for you to afford the payments in future. Refinance would be a good option if you do not have any plans to relocating in another 6 to 7 years.

Miller

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livinginnky · Posted: Sat Sep 08, 2007 9:54 pm Post subject:

You've been there 3.5 years.

Take the new payment and multiply by 360

Then take your old payments add them together and multiply by 318

The difference is what you will save or spend over the next 30 years not counting any adjustments to your ARM mortgages.

Now if you are planning on living there for the next 30 years and you can save a considerable amount of money then it is a no brainer. Add in the fact that you have adjustable rates that could go up there is no better time. In the begining of a mortgage you pay off little principle so the longer you wait the longer you are only putting off the inevitable. Also 6.6 is a good rate and you are probably paying the equivalent when you blend the 5.75 and the 10.75 rates anyway.

ezmortgageloanz · Posted: Mon Sep 10, 2007 6:19 pm Post subject:

Whether you should refinance is predicated on a number of things not shared----namely how long you intend to stay in the property/hold the mortgage and whether or not you anticipate your income to increase in the upcoming years.

I use an easier formula with clients to assist them in determining the breakeven point---here it is:

Closing Costs / (Old Payment - New Payment) = Break Even Period

For the sake of illustration, let's assume that your old payment is currently 1000, your new payment will be 800 and closing costs will be 5000.00---in this example, it would take approx. 25 months to break even.

Hope this helps.

Regards,

Scott

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Is it worth refinancing in the current market economy?