mortgage mortgage
Question: We have decided to refinance our mortgage and take out $10,000 to pay off our credit cards and do some repairs on our house. Our current mortgage is at 8.5% and we owe 70,500 on a house worth about $135,000, with 16.5 years left on our loan. I figured out that with a 5.25%, 15 year mortgage mortgage, we should be able to bundle in our clsoing costs and take out $10,000 equity and have the same monthly payment we have now.
My husband just called DiTech (a mortgage broker that advertises heavily on TV), and was told the best rate we could get would be 5.375% with $2400 closing costs (they didn’t mention if this included any points and my husband didn’t think to ask) because our mortgage is so small. He was told that the lowest rates are for mortgages between $100,000 and $300,000.
We just read an article in the newspaper that said Fannie Mae surveys found that the average rate for a 15 year mortgage is now below 5%. We will, of course, call around to other mortgage brokers, but I’m curious to hear what other folks on this newsgroup are being quoted. Also, are you finding your best deal through an online broker, a local broker, or through your local bank? My credit union doesn’t have particularly good rates when I’ve checked in the past.
Answer: I’m curious why you would take such a long loan, 30 years, on such a small amount? Your payments will only be $182 plus taxes and insurance, but you’ll pay $65,500 by the time you’re done. A ten year loan would have given you payment of $350, but you’d only pay back $41,600.
Perhaps you are planning on paying extra principle payments?
Our payments for $42,700 at 5.5% for 10 years are under $500 per month (not including taxes and insurance). We’ll save even more by paying it off in 6-7 years.
None of my business of course, just curious.
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Filed under: Home Equity Loan
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