My mortgage is 6.99% fixed, is it worth it for me to refinance?
iatan2tlp asked:
My husband and I are huge Dave Ramsey fans and are trying to become debt free. I’m not sure if we should try to refinance or not.
SAMMY
My husband and I are huge Dave Ramsey fans and are trying to become debt free. I’m not sure if we should try to refinance or not.
SAMMY
MATTHEW
I don’t think so. If you have no other debt then just start paying to the principle of the loan.
LEVI
Look into the costs of refinancing first.
DANIAL
This is really an impossible question to answer, as it depends entirely on your personal facts and circumstances. When I look into refinancing, I add up the costs of refinancing and look at how much I save on an after tax basis (remember your mortgage interest is deductible so the less interest you pay the less your tax benefit is), and determine if the “earn out” period is worth it. For me, it has always been not worth it, I have a 6.125% 30 year fixed that I got in 2003. Another thing to consider is an ARM loan. I know, I know, the media has declared them “toxic” and what not, but that isn’t true for responsible people, only for idiots. Anyway, if you get an ARM you can get a much lower interest rate for a period of time, usually 5 or 7 years. The drawback is that the loan will reset at the end of that period, but the upside is that you would pay your loan off much faster if you apply the savings difference to principal. I’m starting to give it a lot of thought, after 7 years my mortgage would be much closer to being paid off and with my credit rating I would surely get the best rate when my ARM fixed rate term expires.
RAYMOND
it will cost money to refi – and would then take you years to recoup that cost and get back to break even – do you even have any equity in the house that would allow you to refinance?
VINCENT
If the current value of your home is more that 80% of the loan value (and some are since the housing market has dropped) then no, it would trigger mortgage insurance on the new loan.