OT - Refi options... good or bad?

[hardonthemerch]

I'm considering a refi. of my home. While I'm waiting on a few return calls, I thought I'd get the opions of some of the greatest minds on the worl wide web.

Quick list of current stats.

Home bought new 2005 for 158,900 at time of close
2006 got a divorce, had to refi - ended up with a 80/20 loan. 80 is at 7.25% & the 20 is at 9.5% - Total financed this go-around was 162
My credit scores are all hovering in the low 700's
I've made up my mind that I only want to be here for maybe another 2 years (but could easily be 3yrs) and then I want to sell, and head west. (I can't stand Atlanta! - lol)

Anyway, - I'm wondering if since I may only be here a few more years, (of course nothings gaurateed), should I even consider worrying with a refi. - If it could save me a couple hundred a month, thats 2400 a yr. Of course closing costs would get rolled into the refi, but I don't really remember what they cost me before.

Would one of the "No/No" finance options be something to look at? (interest only, and ARMS?)

I assume that I'll only be able to refi the 80% because I hear the recent changes, etc aren't as lenient as before.

You guys have opinions on everything from doing it with yer left hand to wearing sandals, so whats your thoughts on the abo?

[marc]

Stay away from interest only at any cost and try to stay away from ARM's...ARM's are the reason many people are in such deep "Potty mouth" today...They can't handle the re-set rate...They took a gamble, they lost and now they want help...JMHO...

[PC_Hater]

You need to read the small print, and you need to do the sums.
'of course closing costs would get rolled into the refi' - be sure you calculate that properly.
If the deal really does save you money then do it, but go in with your eyes wide open.

I was going to re-mortgage to get a better rate in December. All the blurb came through, and being sad I read it, all of it. Being even sadder I was able to compare the terms and conditions with those I had kept from previous re-mortgages going back 20 years.

I decided not to re-mortgage because the 'default' procedures kicked in after one month but the previous ones said 6 months - and that was 6 months in arrears by value not time. It took well over a year to owe 6 months payments. Then there was the bit that made me laugh - 'this loan may be securitised' -  yeah right. That particular way of banks making money had already fallen apart by the time I read it!

I see there was a post while I was typing.
Interest only keeps your costs down but it is not a free lunch. The time comes when you have to pay back the capital! I don't know your circumstances. But read the small print and do your sums will see you right.

Do your sums. Read the small print. If it is the right thing for you, then do it.

[hardonthemerch]

Thanks for the info above. Guys I'm no dummy to the interest only or the ARMS - Hence the reason I have locked in rates now. -

I was just curious as to whther they would be beneficial if I was only planning on being here another couple of years.

[GC Super]

Generally speaking, if it will take you three years to recoup your investment, and you're only planning to be there for 2, you come out behind. I'd be more worried about trying to sell in two years and that you already owe more than the house sold for originally and there's no telling what the market will be in the future. Also, you probably won;t be able to get an 80/20 loan now.   

[IndyHarley]

If you aren't planning on staying in the house for at least another 5 years then don't refinance.

[wavlovr1]

The last home I did a refinance on, they didn't charge me any refinance charges and I got a lower rate. I went from a 30 year to a 15 year and the payment only went up a few hundred. If I were you, I would wait and see how this bailout package rolls. You might be able to get something around 5% once the credit and cash flow loosenes up. I sure wouldn't try to refi anything right now. It would be like buying a new harley and then see them lower the price a few grand the following month..

jb

[hotham]

I just refinanced at 4.99%.  We plan on staying here for a long time.  It doesn't pay to do this, short term, because closing costs, points, etc, take 3/5 years to pay back.  Since you only plan to stay 2/3 years, I say no to re-fi.