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Any Mortgage Gurus out there?

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Any Mortgage Gurus out there?

Postby pjalst » Tue Oct 26, 2010 5:37 pm

The question is, would it be benificial for me to refinace or not?

I purchaced my home 7 years ago using a secured VA loan(this minimizes the cost), at a 5.5% fixed rate. The rates are currently fluctuating between low to mid 4's. I have about $40K-$50K worth of equity(depending on the apraisal). I plan to relocate to another state in 2-3 years.

I would like to reduce my monthly payments so I talked to a Mortage consultant at my bank who gave me the following options:

1. 30 year Fixed rate
2. 30 year fixed rate with bi weekly payments(plus a $75-$100 extra payments)
3. 15 year fixed rate

the 15 year fixed keeps my monthly payments about the same, but shortens the term.

Any suggestions or comments are welcomed
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Re: Any Mortgage Gurus out there?

Postby bleach168 » Tue Oct 26, 2010 5:55 pm

If you're planning on moving in 2-3 years, you probably shouldn't refinance. It usually takes at least that long to make back the money you spend on refinancing fees.
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Re: Any Mortgage Gurus out there?

Postby pjalst » Tue Oct 26, 2010 9:16 pm

bleach168 wrote:If you're planning on moving in 2-3 years, you probably shouldn't refinance. It usually takes at least that long to make back the money you spend on refinancing fees.


Because of the type of VA loan I have. My cost will be close to nothing. I won't need and appraisal which will save me $450 and I qualify for CEMA which will save me $1270 on the NY Tranfer tax.
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Re: Any Mortgage Gurus out there?

Postby RugbyD » Wed Oct 27, 2010 8:45 am

With no closing costs to recover I would go with the 30yr fixed and only do monthly payments. Use the extra savings to 1) pay down any debt you may have that is at a higher rate or 2) invest in something relatively safe with a higher than 5% expected yield. I would suggest closed-end floating-rate funds that hold high yield senior secured bank loans, which will spare you the coming price collapse in bonds when rates rise, or TIPS if they are yielding enough.
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Re: Any Mortgage Gurus out there?

Postby StlSluggers » Wed Oct 27, 2010 9:23 am

RugbyD wrote:invest in something relatively safe with a higher than 5% expected yield.

There are things like that out there now???

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Re: Any Mortgage Gurus out there?

Postby Art Vandelay » Wed Oct 27, 2010 12:45 pm

StlSluggers wrote:
RugbyD wrote:invest in something relatively safe with a higher than 5% expected yield.

There are things like that out there now???

8-o 8-o 8-o

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Re: Any Mortgage Gurus out there?

Postby RugbyD » Wed Oct 27, 2010 1:08 pm

StlSluggers wrote:
RugbyD wrote:invest in something relatively safe with a higher than 5% expected yield.

There are things like that out there now???

8-o 8-o 8-o

I guess 'relatively' is a relative term in itself ;-)
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Re: Any Mortgage Gurus out there?

Postby pjalst » Wed Oct 27, 2010 4:56 pm

pjalst wrote:The question is, would it be benificial for me to refinace or not?

I purchaced my home 7 years ago using a secured VA loan(this minimizes the cost), at a 5.5% fixed rate. The rates are currently fluctuating between low to mid 4's. I have about $40K-$50K worth of equity(depending on the apraisal). I plan to relocate to another state in 2-3 years.

I would like to reduce my monthly payments so I talked to a Mortage consultant at my bank who gave me the following options:

1. 30 year Fixed rate
2. 30 year fixed rate with bi weekly payments(plus a $75-$100 extra payments)
3. 15 year fixed rate

the 15 year fixed keeps my monthly payments about the same, but shortens the term.

Any suggestions or comments are welcomed


I just got another option from the consultant:

4. Since I'll be moving in 2-3 years, A ARM with a fixed rate for 5yrs(currently around 3.5%).
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Re: Any Mortgage Gurus out there?

Postby StlSluggers » Wed Oct 27, 2010 5:09 pm

As long as you are sure you're moving, that's almost certainly the best deal.

And then Rugby's mess...
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