So the place across the street sold at $499K. That's good news because our place is comparable (slightly less updated but more square footage) and we owe $399K, which would give us 80% LTV.
Bad news because a refi is now back on the table, only with considerably less attractive rates. We're currently at 3.5% fixed. The best 30-year rate AimLoan is showing is us 3.75%, and that's with (at least) $9K in closing costs that we'd supposedly have to foot the bill for.
Back in August we could've gotten the same deal for 3.25% interest rate.
The ones we wouldn't have to fork over as much money for would be 4.0% to 4.25%. So we'd actually be going up quite a big from our current rate. That would only save us $154 per month over what we're paying now with mortgage interest. I guess it would pay for itself fairly quickly if it were a nearly free refi. I'm checking again with the AIM guy because I seem to remember when he got me a more "actual" quote, there were no options with zero points and zero closing costs, which the link he sent is currently sending me.
Assuming we could scrape up funding for that (we don't have a ton of cash on hand now that we've committed to the bathroom reno), that would save us about $250 per month. So I guess it would pay for itself in 3 years.
It's just that much more painful because we'd probably have to take out an unsecured loan of some sort to finance the refi. Which would mean it would take more than 3 years to really pay for itself.
I don't know. Interest rates are probably going to keep going up. If we wait longer, it might actually end up being beneficial to hang onto our current mortgage, $260 mortgage interest premium and all, vs. taking a higher interest rate.
I just don't know if it's worth it. I'm so bad at figuring these things out!
Back to refi headaches
January 18th, 2017 at 03:01 am
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For example. If you borrow $400,000 at 3.5 percent, your P&I payment is $1,796.18. If you pay $150 a month in MI, your real payment is $1,946.18. That is the same as an interest rate of just under 4.2 percent.
If you post your P&I payment and your MI payment, I can do the calculation or you can play with a mortgage calculator using your original principal and the total of the two payments to get a close estimate.
January 18th, 2017 at 03:35 pm 1484753724
January 18th, 2017 at 03:40 pm 1484754001
Two other thoughts. First, one comparable sale does not make an appraisal. The appraiser will need three. If the other two sales do not support the third sale, the value may come in low. Second, read your mortgage documents carefully. In theory, if you deed an interest in the property to your tenants, the lender can invalidate the mortgage, declare you in default, and demand immediate repayment. This rarely happens, but there is some risk that this could happen.
January 18th, 2017 at 03:46 pm 1484754417
That's a good point about comparable sales. This is the first one that's been at the value we need. Of course our place is bigger than all the closest comparables but I'm not sure how much SF would really impact it.
The document I'm considering with my neighbors would not give them an interest in the property until they'd paid their full share. At that point we would draw up a new deed with them as equal owners. Wouldn't happen until the mortgage was paid off. Of course I need to check with a lawyer (besides my neighbor who's a real estate lawyer) to make sure that couldn't be used as proof that there was actual ownership before that.
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