| Combining loans into single refi |
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vurt
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| Combining loans into single refi |
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Hello. This is my first post.
I have the opportunity to combine my existing 30 year 6% mortgage (10 years in) and a heloc (currently at 2.75%, .5 below prime, variable rate) into a single 20 year conventional loan at 4.375%.
My balance on the mortage is ~115K. My balance on the heloc is ~20K. I also plan on rolling in the closing costs ~3.5K.
My plan is to sell the house within the next two years, so I'm wondering if it would be better to simply refinance the balance of my mortage rather than roll in the heloc.
My original motivation was to lock in the combined loans into a safe rate, at a term no greater than the balance of my existing mortgage, fearing a rise in inflation, but now I'm considering gambling on the 2 year forecast for the prime rate.
Just looking for some perspective. Any comments welcome.
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Wed Oct 06, 2010 2:01 pm |
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coaster
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Can you amortize the closing cost over two years?
~Tim~
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Wed Oct 06, 2010 3:36 pm |
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vurt
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Hi coaster,
Is that typically something that a lender would be willing to do?
This has been always been sticking point for me, mortgaging closing costs, seems I never have enough to bring to closing.
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Wed Oct 06, 2010 3:40 pm |
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Sologrande
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Dont refi, sell your house NOW, There is no cost benefit to refi. Why didnt your lender do the math for you??? Sell now, who knows where realestate will be in 2 years, more than likely down.
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Wed Oct 06, 2010 4:14 pm |
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badcredithomeloans
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| Depends what your goals are but sell if you can! |
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Agreed with Sologrande. If you can sell the house sell the house. If you can't sell your home figure out which goal is more important between spending less on interest or having lower payments. Then do the math and figure out which option will help you reach your goal. Personally variable rates are scary to me. Just my two cents.
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Thu Oct 07, 2010 12:06 am |
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coaster
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quote:
Originally posted by Sologrande
Dont refi, sell your house NOW, .
Have YOU tried to sell a house lately?
Vurt - I simply mean that in order for this to be a benefit to you, you have to "pay" for the closing costs in two years, since you plan on selling in two years. Yes, you roll them into the loan, but that of course increases the loan amount. If you can break even in two years, then it's worth doing. If you can't, then you're going to sell your house and pay off the loan anyhow in two years.
The lender should be able to help you figure out whether you can amortize your closing costs prior to selling the house.
~Tim~
Eye Candy : Why Whimsy
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Thu Oct 07, 2010 7:04 am |
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vurt
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I know nobody has a crystal ball, but what about the heloc tied to prime?
Part of what I'm looking for is security. I can control this somewhat by paying extra on principal, but I'm more worried about a rapid rise in the prime.
I've also heard that lenders may start to become more conservative on the mimimum required payments on the helocs.
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Thu Oct 07, 2010 12:51 pm |
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coaster
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My personal opinion is that this low rate environment will last for awhile. It's going on two decades in Japan. When it ends, it will end badly, like all financial market distortions end. But my opinion, and caution it's only opinion, is that it's going to last for another couple years, at least.
~Tim~
Eye Candy : Why Whimsy
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Thu Oct 07, 2010 3:06 pm |
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iwillguide
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Refinance is good if you feel no difficulty.i know how hard to be in debts.i personally did lot of loans for high interest rates from different lenders and not paying.One day i took big loan amount and clear all debts and now made a single repaying arrangement from the lender.He agree and i am free and slowly coming out of loan debts.
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Sat Oct 09, 2010 5:38 am |
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financegenie
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Well i would say on this hire a adviser who can suggest you what would be better for you to do. As of now i agree with you but not predict what could happen in 2 yrs.
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Sat Oct 09, 2010 6:54 am |
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