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tip1 · Joined: 31 Jan 2008 Posts: 1 1.35 Dollars($)

I own a second home in Orange Cty. N.Y. I presently owe 83,000.00 on home and have a home equity loan of 23,200.00. The interest rate is 6.25 onhome and about 7,? something on equity. I just want to lower the amount i pay each month.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi tip,

Welcome to the forum.

If you are offered a better rate and terms, then why not? You can refinance but before that you should remember that you will have to pay the closing cost and the prepayment penalty for that. So after paying closing cost and the prepayment penalty, will it be profitable for you? If it seems profitable for you then go for it.

Feel free to ask if you have any further questions.

Best of luck.

greg1 · Posted: Thu Jan 31, 2008 2:32 pm Post subject:

You might not have a pre-payment penalty on you current loan. Pull out your loan papers and look for a pre-payment penalty rider or read yout note to see if you have one.

Get some quotes and see if you can save some money.

Posted: Thu Jan 31, 2008 4:34 pm Post subject:

Why does your post bring up an image of a deer with glazed eyes in the headlights? Probably because you MAY be that deer. You are setting yourself up to be "taken". My guess is that closing costs in NJ will wipe out any real savings with the existing rate spread. It's easy for a pitch man to disguise this with a de facto extension of remaining term.

Short-term rates are heading south so the payment on the HELOC will be going down. Refi could (maybe) make sense but have the LO run the number on the new mortgage with the payment set at the ACTUAL REMAINING TERM of your existing first mortgage. Look for a recovery of closing cost in 24 months or so.

My guess is that the number won't dance with the loan size/anticipate closing costs you'll have … but it would be easy to con you.

evolovik26 · Posted: Fri Feb 01, 2008 7:52 am Post subject:

ok lets do some calculations. Assuming you do not have a prepayment penalty.

Total mortgage ammount about 107000+3000 hard closing costs+1 point of origination $1000 = 111,000 add another 1000 for escrows if that is what you want. So lets assume 112,000 when all said and done for the new loan. (you will skip a month worth of payment and the old escrow account will be returned to you).
Now here is the best scenario:
Currently rates floating right at 5.5 for a 30yr fixed mortgage. This requires 680+ credit, 80% or less loan to value ratio, 40% or less debt to income ratio, and 2 months reserves (there are exeptions but this is pretty much it )
So if you have all that you can get 112,000 @ around 5.5% (these flactuate daily) = $636/mo+taxes and insurance (however remeber your loan resets back to 30 yrs)
So if you have the home value, the credit, and the salary then this is what you can expect and if it is good enough for you then by all means check with bank/broker to see if you qualify.
If you dont qualify for this type of program then depending on what you qualif for you will likely get higher rates or mortgage insurance or something else that will drive your costs or monthly payments higher.

gmakerley · Posted: Fri Feb 01, 2008 9:05 am Post subject:

the old saw was savings of 2%, but that went out the window years ago. honestly, if you are happy with the savings on a monthly basis and can tolerate the closing costs associated with refinancing, then i submit you ought to move forward.

by all means, get quoted rates and fees and see if it makes sense to you. if it makes sense, and you are sure that you're dealing with a reputable lender, you may well determine that refinancing is the right choice.

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Should I refimance??