Here's the deal:
Bal - $57,900
P&I - $496
Mortgage Type - 30 yr ARM due to go adjustable 09/07
Interest Rate - 9.24% APR
I know the IR sucks, but my credit isn't the best either. I working on it, though.
Here is the refinance package:
Bal to borrow - $74,500
P&I - $567
Mortgage Type - 30yr Fixed
Interest Rate - 8.375% APR
Looks like about $6700 in closing.
Now, I must do something before 09/07, that is when the adjustable kicks in.
The $74,500 includes enough money to pay off a few credit cards ($4800) and leave me about $3,000 in cash.
I've been paying bi-weekly with $50 extra each payment.
The part I don't like is $74,500 - $57,900 = $16600 more to pay of now. But that adjustable rate is going to bite me in the butt.
Any help would be appreciated.
$6700 in closing costs?
Is that correct?
If so it is a royal screw job.
The benefit in refinancing I see as minimal though you don't say what the IR is going up to. Perhaps you don't know yet but it would be useful to know.
What I'd do?
Pay off the credit cards ASAP. Everything extra into that.
Skip the $3K
Skip the closing costs---$6700????????????????
Then pay extra on the house and keep looking for a better credit deal somewhere.
I wouldn't do it and by your strategy you are going to pay a lot for that house.
Refinancing based on a 9.24 vs 8.375 rate you are only saving about $40 per month. Hardly worth the expenditure you are talking about.
Perhaps you did not do a good job of getting your point across.
You have a poor credit score? 8+% is a high mtg interest rate. Avg is about 5.5% for 30 year fixed. $6700 closing cost is a rip too.
if you borrow the $74K you can make a lump payment on principle of the extra $16K
yes re-fi, but shop around for better terms.
ask your local credit union, not a full time mortgage vampire.
rates won't go down between now and when your adjustment kicks in, so lock that in.
Have you looked at a fixed 15 year? Won't change the monthy by much, and you should be able to get a better rate.
No. You'd do yourself more good paying a 100 dollars a month towards the principal each month [or as much as you can, even $20 a month will save you at least 5 years on your mortgage]. Pay off your piddly bills and get your credit fixed then refinace when the interest rate offered is at least 1 1/2 - 2 percentage points below what your current rate is.