Can I switch from a fixed 30 yr. aND a 2nd 15 yr. fixed mortgage over to an “Intrest Only” for a few years?
by Mortgage Rates on Monday, November 1st, 2010 | 2 Comments
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As long as your payments are on time, try going to your current bank first to request a refinance. They may want to keep your business. Refinancing may cost you closing costs so keep this in mind. If you can recoup your costs in three years or less then it makes sense. Make sure you get two or three banks to give you a quote. Interests are still very attractive. you can have your credit pulled three times for a mortgage before it affects your score. Knowing your options will help you make a right decision. And good luck =D.
What will affect you most is how much equity you have in your home. With tighter lnding standards, they are getting kind of picky on loans over 80% loan to value. A refi may make sense if you can get a 90% loan on the entire balance at 6.5% with no points, inlcluding the PMI (mortgage insurance) getting paid up front.
You will most likely need an appraisal to get a refi or to adjust the interest on the second. As the previous writer said, check with the lender and tll them the situation. Say “Hey, I can pay 4% interest only for 5 years or I can pay $0 now and go bankrupt.” Also, you may want to check with family and see if you can do an equity sharing arrangement. This is tricky, so beware because it can cause legal problems.
Or, consider renting out a room.