Should I refinance my home if I plan on selling it within 2 years?
heh asked:
I have a $92,000 home loan at a fixed rate of 6.75 for 30 years. Right now my payment is $600 per month. This does not include my PMI payment of $46.25 a month.
I plan on making this same payment after refinancing, but applying the excess to the principal. Would this be beneficial to me if I am going to sell the house in 2 years? Should I let it be? Should I get a loan for a shorter amount of time?
Daniel
I have a $92,000 home loan at a fixed rate of 6.75 for 30 years. Right now my payment is $600 per month. This does not include my PMI payment of $46.25 a month.
I plan on making this same payment after refinancing, but applying the excess to the principal. Would this be beneficial to me if I am going to sell the house in 2 years? Should I let it be? Should I get a loan for a shorter amount of time?
Daniel
May 26th, 2009 at 1:03 am
Maureen
It depends on 1. If you can save at least a full percentage point on the rate and 2. if the closing costs outweigh the benefit.
May 28th, 2009 at 9:53 pm
Dolores
You can run the numbers and draw your own conclusions, but you should consider an ARM if you plan to sell in two years. The credit crunch has caused rates to plummet, and if your credit rating is strong, you should be able to do very well.
May 29th, 2009 at 5:29 am
Bessie
selling in 2 yrs ? refinancing is not what u want do. u will not recover ur expenses.
May 29th, 2009 at 6:25 am
Antonio
One will hope that within two years the market has leveled out at some future lower price, it maybe a long shot that your property will increase in value in two years
May 31st, 2009 at 12:17 am
Edgar
How much is the refinance? What are the fees and closing cost?
Once you find out how much it will cost to refinance THEN see how much you can save over the two years in interest and possibly by removing the PMI (if appraisal leaves you borrowing under 80% of value).
SO if it cost $3000 to refinance and you can save $220/mo then YES refinance.
BUT if it cost $3000 and you are only going to save $120 a month then NO don’t refianace!
You do the math and decide!
June 3rd, 2009 at 5:02 am
Adam
I would take a look at my situation as a whole. Do I want to draw on the equity that I have in the property now or do I want to save that equity for when I sell and use that for a down payment on my new home. It also boils down to your current finances, are you struggling and need to eleviate some outgoing expenses to be comfortable, than yes you can do that by using the equity you have in the property and paying for the closing costs that will in turn raise your loan amount but possibly reduce your rate and save you money. I like what one of the other person said and run your numbers and see what benefits you the most for the situation that you face. What do you have to lose, you find out where you stand and if you decide that its not a good idea, at least you are not obligated to make any changes.