Posted on: 29th Apr, 2009 09:36 am
I currently have a 5.375% fixed 30 year mortgage, with a principal balance of $542,000--I have 20 years left on the term. I anticipate being in my house for another 5-7 years, and was thinking about re-financing with a 7/1 ARM with a rate of 4.75%, no points, but fees and mortgage recording taxes totalling approximately $10,000. I would have to pay down my existing mortgage principal by $42,000 in order to qualify for this rate on the ARM, as it is a conforming loan. Is it worth it to do it this way?
hi
if you're planning to stay on the property for another 5-7 years, and not longer than that, then i think refinancing into a 7/1 arm will be a good decision. but the costs involved in the refinancing should also be taken into consideration. the point that you should take into account is the break even point i.e. the time taken to recoup the closing costs involved in doing the refinance. this will give you an idea whether a refinance would be a good option for you, considering the fact that you intend to stay in the property for just 5-7 years.
if you're planning to stay on the property for another 5-7 years, and not longer than that, then i think refinancing into a 7/1 arm will be a good decision. but the costs involved in the refinancing should also be taken into consideration. the point that you should take into account is the break even point i.e. the time taken to recoup the closing costs involved in doing the refinance. this will give you an idea whether a refinance would be a good option for you, considering the fact that you intend to stay in the property for just 5-7 years.