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Thread: Anyone do mortgages/finance?

  1. #11
    I think you have some major decisions to make here rahimlee54. If you are still doing research about refinancing then you may want to check out this site. I am providing a link to a page that talks about Escrow Accounts but it also has some good information about PMI.

  2. #12
    Senior Member DeepCSweede's Avatar
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    I am not sure what your PMI payment will be, but for example say on a $200,000 loan at 6.5% you are paying approximately $1750/month on a 15 yr loan. If you dropped down to 3.375% on a 15yr, your payment would drop down to the ballpark of $1,420/mth. which is a savings of $330/month. Based on what you are saying, it sounds like PMI would be around $4,000 for the time it would take for you to get up to 20% equity. Based on that plus refinance and appraisal fees, it would pay itself off after about 21 months. My approach with my investments is that if the payoff is past the sales date of the investment it pays to take advantage of the lower rate. Plus if you escrow, you are better off refinancing now vs the end of the year, because you have to come up with the cash for property taxes/insurance out of pocket usually to cover the year plus a two month cushion.

  3. #13
    Senior Member Seth's Avatar
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    The rules use to be that you couldn't get out of pmi for at least two years in addition to the 20% equity. I think it is important to try to figure a realistic projection about when you can remove pmi so you can weigh that against the lower payment. Any well-off people in the family? Some older folks might love to get say 4% on a short term loan compared the .4 % they are getting now. I did that once with my father all legal like with a mortgage document and it worked well for both of us. Some lenders have been doing 'responsible ownership' programs where the only requirement was that you have reasonable credit and have paid on time for the past 12 months. The only other thing I can think of is I will have to take a ride down and do an appraisal that will give you instant 80% loan to value.
    Everywhere you go, there you are.

  4. #14
    Senior Member Seth's Avatar
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    Here is a little calculator if you need it: http://www.3re.org/resources/index.cfm

    Have you considered a 30 year loan? Your monthly savings would be substantially greater and the payback on the pmi that much quicker. My experience has been that the money made on residences came more from appreciation than paying down a mortgage (well, maybe not at the moment!). Also, you can always turn a 30 year into a 15 year by pre-paying when you are not buying knives but you can't turn a 15 yr into a 30 yr.
    Everywhere you go, there you are.

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