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Should I refinance or downsize?

My children are both in college and will leave the house in a few years. I need to lower my monthly payments and I am not sure if I should refinance or downsize. by julie._118_180 from Gilbert, Arizona. Feb 10th 2013 Reply


Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 718 contributions

Hi Julie! You would need to assess your savings to your break even time frame. If you are looking to sell your home in 2-3 years and the break even period won't take place until the same time frame, it would be best to stay in your current loan. You would need to make an application to have a Good Faith Estimate generated and then determine what, if any, is required for you to bring to closing and/or what increase in your loan amount is required to complete your refinance. I'd be happy to analyze your situation more closely if you'd like off line. Good Luck!

Feb 10th 2013
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Joe Metzler (JoeMetzler)
#2 ranked lender in Minnesota - 2,486 contributions

You need to live somewhere. For most empty nesters, downsizing is the way to go. You simply don't need all the space, so why pay for it?

Feb 11th 2013
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Mike Kortas (mkortas)
#106 ranked lender in Arizona - 2 contributions

It seems to me that downsizing is a strong possibility due to your children going off to college either way. If your current loan rate is higher than the market you should definitely do something either way. 1) Keeping your current home: If there is a strong likelihood that you will downsize in the short term (a few years) then it likely doesn't make sense to refinance (depending on your current financing) unless you would plan on keep this home well into the future as an investment property. In that scenario, refinance right away to take advantage of rates before they continue to increase as they have in the previous 1-2 weeks.2. Downsizing: If you have no use for the larger home, then downsizing could very likely allow you to save money on a smaller home as well as taking advantage of the incredibly attractive interest rates at the same time. Do it now if you are going to do it, as rates will certainly go up with home prices after 2013.Mike KortasSenior Loan OfficerNOVA Home Loans480-228-5442 Mobile

Feb 10th 2013
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David Kester (davidkester)
#78 ranked lender in Arizona - 18 contributions

Julie,Nobody can answer these questions without knowing more about your short term and long term goals. Right now it's a sellers market ( low inventor and a high demand for house). If you would like to sit down face to face with a lender who cares, please give me a call. My office is in Chandler off the 202 San Tan & Cooper road. Thank you,David Kester Mortgage Planner 602-628-6500

Feb 10th 2013
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David Kosmecki (David_Kosmecki)
#43 ranked lender in Minnesota - 167 contributions

Good question! If you are going to downsize, refinancing is not a good idea unless a lender is able to do a "no cost" refinance where the costs are paid from the lender's premium and not your cash or equity. Refinancing certainly could save you some money depending on your current rate and balance but purchasing at today's low rates with a smaller loan will save you even more. Good luck with your decision.

Feb 10th 2013
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Linda Wintersteen (Linda123)
#64 ranked lender in Arizona - 897 contributions

HELLO , i lived in gilbert for over 15 years, a nice little town. as others have said, first you need to look at your financial goals, also, are you upside down on your home? what do you do for a living? if you want to go privately, you can email me at yourloanpartnerforlife@live.com linda or phone at 602 330 1598

Feb 10th 2013
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Steve Azarch (sazarch)
#18 ranked lender in Tennessee - 93 contributions

You should get with a loan officer and see what your payment will be if you refinance and then decide if it will be better to downsize or refinance.

Feb 10th 2013
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Joe Shamie (Joe Shamie)
#1 ranked lender in New Jersey - 1,409 contributions

It depends on your time horizon. If you plan on being in the house beyond 3-4 years from now, you should look at refinanicng at these record low rates. If you will not be there that long, you are going to be better off doing nothing.

Feb 11th 2013
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