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March 10, 2008
Refinancing Mortgages? - what's the average?
With all the talk of the jumbo loan limit increasing to $729K,
I wanted to gauge the average time brownstoners refi their mortgages.
I bought my PS house in 2003 with a 5 year Jumbo ARM at 5.75%. I refinanced in 2007 as I was in need of $40K to pay for my wedding and thought let me refi while the rates are still "low" as my ARM was going to expire in 2008. However the refi left me with a montly payment that's almost $400 more than what I was paying. I currently owe $620K on the house(it was appraised at 1.2mil)
Anyway - do you think I should try to refi again? Does it seem weird/bad/high/ if someone does 2 refis in 5 years???
Comments
Absolutely, as a mortgage consultant I've seen homeowners refinance 5 times in six years. You should be able to qualify for a rate any where from 6.375-6.75 depending on scores. This is on a 30yr fixed mortgage. Give me shout! I'll run some numbers for you.
-Will
Posted by: Renovation Specialist at March 10, 2008 3:29 PM
Sell.
Posted by: guest at March 10, 2008 3:29 PM
Anyone who refinances 5 times in 6 years is getting hideous advice from his mortgage 'consultant'.
Posted by: curiositykilledthecat at March 10, 2008 4:57 PM
You are thinking about this all wrong. The advise from the broker is obviously skewed and biased. He'd love for you refi as often as he could get you to so he could get the fees.
You have to take in to consideration the cost of your refinance, the #number of years you plan on being in the property, and the rate at which you can refinance.
if the math makes sense, then you should obviously refinance. If you refinance and you end up paying more than you were paying prior to refinancing, (assumming you refinance for an equal or longer period of time as the original loan) you got HORRIBLE advice.
just my 2 cents.
Posted by: PutnamStoner at March 10, 2008 5:39 PM
Wait a minute, is there anyone out there thinking that the OP is _not_ actually a mortgage broker?
Posted by: guest at March 10, 2008 7:17 PM
thanks 5:39 I think I was so in need of cash to pay for the wedding, that once it was all said and done and realized 2 months past refinancing I was in fact paying more than I was at the start.
and 7:17 - I am not a mortgage broker......
i wanted to see what others in bklyn nabes are doing. I am probably like many of you where I don't make $200K a year but was curious to see how people were making it all work.....
Posted by: gemini10 at March 10, 2008 7:58 PM
Don't want to sound like an ass but if you're not making $200k why did you buy a house that was appraised for $1.2mil?
Posted by: guest at March 10, 2008 9:18 PM
9:18 - because I bought the house when it was 850K in 2003 with money I received from an inheritance....
so is it safe to assume that most of Park Slope is making over $200K? last time I checked the median income was $55K
Posted by: gemini10 at March 10, 2008 9:40 PM
no wonder america is in trouble when people use their houses as piggy banks to be raided for any need.
Anyway I have a feeling that if you refinance (which is no "strike" against you) you will find no lower monthly payment. Only in a few places (mainly CA) have conforming limits stretched to 700k but more importantly banks will look far more closely at your situation (income and assets) than they did last time. It sounds like you are financially hand to mouth? don't be surprised if you can't get anywhere near the headline mortgage rates advertised on sites.
if your fico is great then try for a libor+spread floating rate mortgage and save like crazy while the rates are low. Then pay down and refinance fixed if the economy recovers and fed raised rates 50 bp. By then banks will be more willing to lend than now as presumably they will have stopped bleeding, but that could be a year or two away - and you'll be paying really low rates in the meantime.
Posted by: guest at March 11, 2008 12:17 AM
Why do you keep doing 5 yr ARMs if you are going to stay in the house and your situation is expected to stay the same? Unless you expect to move or make more or get another inheritance in 5 years, you are not the person who 5 yr ARMs were designed for. If you can't afford the rate on the 30yr fixed, you can't afford your house.
Posted by: guest at March 11, 2008 12:28 PM
Agree with 12:28. Dumb to use the house to finance your $40k wedding too.
Posted by: guest at March 11, 2008 2:47 PM
Its dumb to pay $40k for a wedding.
Posted by: guest at March 11, 2008 4:49 PM
do you want an arm or fixed? If you plan on keeping the property a few years and the monthly savings is substantial then why not? i'll pay some of your closing costs out of my pocket and might be able to get your mortgage tax waived... send me your name and work number and I'll contact you. jayrhee@gmail.com
Posted by: guest at March 19, 2008 10:17 PM
first question should be what is your current rate?
Posted by: guest at March 19, 2008 10:18 PM
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