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Should I refinance or stick with current mortgage?

My current loan was originally 190,200 at 5.875 (not APR) for 30 years, this was five years ago and now currently at a balance of 160,000. If I didn't refinance, I'd pay 36,000 additional against the principle. Now I can refinance to a 20 year at 3.75 (not APR) for 128,000, which would require 32,000 in cash and 4,000 for closing costs. The home has devalued, so I really am wondering what would be the best option. by sam.bi_850_211 from Clearwater, Florida. Nov 8th 2011 Reply


Matthew Rundle (MatthewRundle)
#533 ranked lender in California - 8 contributions

Si Sam. In lieu of your value going down, if you plan on staying in your house for the long term, I think investing back into your house the funds required to do a 20 year loan would be prudent. You are attacking your mortgage on two fronts. 1) You would be reducing your interest rate and, 2) You would be reducing your term. In addition, your new payment will be very close to your current payment. Big picture: In doing so you are eliminating a ton of interest you would have to pay the lender. Sam, to the contrary...if you have no intention of staying, consult with a realtor and strategize on your options to sell. I have a good realtor contact in Clearwater, FL. Feel free to call/e-mail me if you have any questions.Sincerely,Matthew RundleWestin Mortgage(909) 630-2029 DirectE-mail: matt.rundle@westinmortgage.comNMLS#: 298953

Nov 8th 2011
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

The best advice I can give you is to contact a local mortgage broker, not a bank, and have then put your particular scenario in a "total cost analysis" calculator. This will give you a clear comparison of which product will best fit your particular situation. based on your example, there is no doubt you can save if you refinance, the real question is what term?? 20 year loans are usually priced the same as a 30 year loan... but based on your information provided above, you would lower your payment if you added cash to your balance and financed at 15 years, making your savings well worth it... WilliamAcres.com

Nov 8th 2011
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

Dear Clearwater -- I'm going to gladly give you the best answer here believe it or not. Remember -- cash is king and still is. At the end of the day -- he who has the gold, make the rules. Why am I saying this so blunty? Do yourself a favor -- Dont put any more money down to pay down a property that I can prove to you will decline by many many more thousands 24 months from today. Use the banks money always. This apply to you even if you plan to die in the home that you currently live in. I can go on all day about why this make perfect financial sense -- The numbers dont lie. The American Dream of home ownership needs time to recover its value literally. The biggest asset you buy now today, which is your home, is no longer your biggest investment. Evaluate it's cost over the long haul. There is a great site that can help you figure this out --- www.dinkytown.netI have programs here than can refinance you with no appraisals or with appraisals up to 125% undervalue............ and still get you the rate of at least 4% -- maybe lower. Email me at andrew@doubleamortgage.com --- Call me directly at 813 601 0221. Your Tampa Friend - Andrew Alfonso

Nov 8th 2011
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Cory Ure (coryure)
#46 ranked lender in Utah - 50 contributions

If you have a conventional loan I think you may want to wait and see what comes of HARP 2.0 refinance in a couple of months.HARP 2.0 will not have an LTV limit like 1.0, will encompass more loan products that are held by Fannie Mae and Freddie Mac and will allow you to "streamline" refinance to a lower rate and a shorter-term loan product (i.e. 20 or 15 year loans). At this time we are just waiting for guidelines to come from Fannie and Freddie. This could be a few months down the road though. Keep in touch with a trusted mortgage adviser in your area to keep tabs on when Fannie and Freddie finally pull the trigger.

Nov 8th 2011
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James Sutch (jimsutchloanguy)
#94 ranked lender in Florida - 3 contributions

Yes. Refinance. Call me anytime. 727-433-2299All the others who answered your question are making it way more complex than it is. Yes, refinance. Simple.Jim Sutch Sr. Loan Officer, The Mortgage Firm

Nov 8th 2011
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Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

Dear Clearwater It's that simple analogy that has this entire country underwater. Allot of the companies out there just want your refinance for the dollars it pays -- Just make a sound decision. Be careful of the guys that are only interested in getting you into there pipeline before Christmas. Andrew 813 601 0221

Nov 8th 2011
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