My wife and I are looking to refinance our house. We plan to retire and move within the next 8 years. We fixed up a house and it was appraised at $350K 12/2009 before we put $20K into the upstairs. It was again appraised at $283K 5/2011, but we couldn’t get a refinance at that time. Our present mortgage = $288K or $1612 a month. Our Home Equity = $75K or $288 a month for a total of $1900 a month in payments. The primary mortgage = 30 yr fixed at 5.86%. The Home Equity is variable at 4.49%. All mortgages stated include Taxes and Escrow (I pay insurance myself). To cover both loans our bank (reputable) is offering a no cost (to us) and no roll into new mortgage: 1) 5.49% 30 year fixed, $1885 a month (saves us $15 a month) – big deal 2) 1% Year Variable at 4.24% (.99% over Prime). Every year it adjusts to .99 + Prime. It has a fixed option for the 1st 4 years - 3% + 4.24% = 7.24%. Cost = $1695; savings = $205 ($1900-$1695) a month or $2460 saved each year loan rate remains at 4.24%. Job circumstances: My job is in jeopardy. I figure I have a 50/50 chance of losing my job within 2 years. I estimate I should be able to get another within 6 months at 80%. Q1: Does my job situation make it better to refinance (option 2) or worse. I would have less in monthly payments but I have risk of increase in payments (.99 + Prime) if interest rates rise. My worry is that if I lose my job I will not be able to refinance or even if I get a new one, I start a new job history and refinance may not be possible. My thought on mortgage rates are they will remain low for the next 2 years, but certainly the risk is for them to rise. I figure we could sell the house right now for county appraisal - $288K (I’ve checked area sold houses). I might have to pay real estate fees out of my pocket if we sold now. It is a 4/4 2 story in a nice neighborhood. We improved it significantly. Should we refinance?
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find an Expert to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!
Yes, I am still waiting on an expert. I thought Eric had the right experience to answer, but I would probably take someone else if they have a good financial background. I am willing to provide a bonus for a well thought out reply. The appraiser wants to appraise the house. I would like to get some opinion on whether I should refinance as soon as possible.
Sometimes, finding the right Expert can take a little longer than expected and we thank you greatly for your understanding. We’ll be in touch again shortly.
Dear Friend,I read your question in detail. I feel that looking to your job circumstances, your chances for a refinance would be very slim is you spend another two years. So, first of all, you SHOULD refinance. Your job situation is much better AT PRESENT to get it refinance.Having said this, the option of taking the of fixed interest rate with .99 adjustment over the prime. As you say, in your question, that this would save you $2460. Here, theoretically, you are correct that you have a chances of increased interest rates, but it is not as much as you presume. As per my reading, the rising of interest rates has a very very remote chances as any rise in interest rates NEGATIVELY IMPACTS the demand and it aids the slowdown, which the government and federal reserve would never want. So, the rising rates is some thing you should not worry much about.On the other hand, the property price are set to improve in coming years and your current job circumstance is favorable you should get it refinanced rather then sell out. The interest rates will not rise as much your property is expected to improve in valuation.So, in my opinion, you should get this refinanced.I am sure this would help. Please feel free to revert for any additional queries if you have.Warm Regards,