I have fixed mortgage rate that is about to expire and be adjustable should i refi or sell?
by Mortgage Rates on Friday, September 17th, 2010 | 7 Comments
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Check comp sale prices in your area; real estate market is pretty soft in a lot of places and you might take a bath.
your best bet given the current market is to refi. if you have been good with your current company, just call and speak to one of their loan officers. DO NOT go to any online sites or any brokers. Also if you have been good with your current lender than you should have little to NO fees what so ever. If not contact a local bank or call a broker that you can get referals from in order to find your best deal… BEWARE of broker fees though.. Good Luck to you
You should check to see what your adjustable will rise to and what rate you are eligible to get in a fixed 30 yr. mortgage. Get out a calculator and pencil and paper and run the numbers. Determine what it will cost you, over 30 years, to refinance. Remember that you have paid only interest during this time period so your principal balance will be pretty close to what it was when you took out your loan.
Finally, determining whether you should sell or keep your home is a similar calculation. Sit down with pencil and paper and determine what it will cost you. Factor in the intangibles such as your desire to stay or move, and you have your answer.
Good luck.
You really need to refinance before it adjusts. If you sell, it could take quite a while to actually sell rates never stay the same at the adjustment points and rarely are they a slight adjustment.
I am a Strategic Mortgage Planner, and would be happy to look at your situation and let you know exactly what your options are. Please contact me at 330-467-5333 or email at Palmer@TheGlobalAdvisors.com
Selling the house in this market will take a good 6 months, unless you get a realtor that does a superb job of marketing, and sell the house for under value. Your best bet is to refi, and the thing about your bank you’re using now is, sure they may not charge closing costs, but your loan will be based on the property value at the beginning of your loan. The general rule of thumb is that property values tend to go up about 3-6% every year. It’s not as true today as it was a year ago, but it’s still a rule of thumb. So, if you go with your bank, they’ll undervalue your home, and you’ll pay a higher rate because you’re getting a higher LTV loan than what you would get if you went with a broker, who will do an appraisal, and can get you a lower rate anyway, if they know what they’re doing.
The best answer is……….maybe.
Ask yourself these questions.
Are you going to be selling the house soon? If so maybe refinancing is not the best option for you.
If you’re going to stay put for at least 2 years or more it may be worthwhile for you to refinance.
Here’s an easy method to find out.
First find out what your total cash costs to refinance are, i.e. closing costs, loan fees, recording, etc.
Then subtract what the difference is between what your new payment would be and what your existing payment is.
Now divide that number into your refinancing costs.
The answer is the time in months it will take you to break even on what your new payment is versus your refinancing costs.
I would say that it is up to you. If you are ready to move then you can sell. But I have found through my experience that you can just refi. It is up to you.