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Should i refinance my home?

Written By: admin on October 25, 2009 One Comment

Bought my home 2 years ago for 216,000. I owe about 211,000 on it now, i did a Combo loan 1st and 2nd mortgage, not sure if that was a excellent go or not. 1st mortgage rate is 6.125% at 162K and second mortgage rate is 8.875% at 54K. If i refinance i have to pay closing cost which will be like 6K, which will place me farther back than what i originally paid for the damn house (216,000) I just got offered 5% with one of those FHA Express loans , not sure if im gonna do it.
FHA Express: Rate is fixed. The payment on a 3,000, 30-year fixed rate loan at 5.00% and 80% loan-to-value (LTV) is 74.33 with 0.875 Points due at closing. Payment includes a one time upfront mortgage insurance premium (MIP) at 1.75% of the base loan amount and a monthly MIP calculated at 0.50% of the base loan amount. The 0.50% monthly MIP will be paid until the loan reaches 78% LTV, provided the MIP has been paid for a minimum of 5 years. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan. Some state and county maximum loan amount restrictions may apply.


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One Response to “Should i refinance my home?”

  1. Noneya on: 25 October 2009 at 7:16 pm

    With the info you provided, here is what I came up with.
    Your current payments should total $1,413.98 + taxes and insurance.
    Using the numbers you provided, your new loan amount should be $216 to $217,000.00 not $203,000.00.
    $216,000.00 + the upfront mortgage insurance premium @ 5% =$1,179.83 + the monthly mi of $90.00 = $1,269.83 + taxes and insurance.
    You save $144.15 per month which means you will need to stay in the new loan for 41.6 months to break even. Take the $6,000.00 closing costs and divide that by your monthly savings and you get your break even point of 3.46 years.
    Here are a couple of ways to speed things up.
    When you refinance you will skip at least 1 mortgage payment. Send that payment in and have applied to your principle. You should also receive a refund from your current lender for your escrow account. Do the same thing, send it to your principle.
    I hope this helps

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