Refinancing your home

**Autumn1102** · 02-20-2008, 09:09 PM

Does anyone know much about this? What is the point of it exactly? Does it lower your payments but make your mortgage longer? I know its a dumb question but I was wondering.

**FrugalMomof3** · 02-20-2008, 09:13 PM

Well, refinancing does the following:

~ Lowers your interest rate (that's what most people are looking for when they refinance)
~ Monthly payments are less

Bad sides: Depending on the term it will take you longer to pay it off.

Example: You currently have a 30 year mortgage and currently have 28 years left, if you refinance now with another 30 year term, the 30 years starts all over UNLESS you opt to get a lower interest rate and a 20 or 15 year term, this will then increase monthly payments but you pay it in a shorten time period.

**Autumn1102** · 02-29-2008, 09:00 AM

That makes sense. We may look into it. Thank you

**itlw8** · 02-29-2008, 10:55 AM

If you can lower your interest a minimum 1 pt even if your have to add a few years back on to the loan if you continue to pay the old payment then you will have it paid off 2x as fast.

some people it can mean they can keep the house that was too much to start with.

We decided that at this time it is not low enough to pay the costs involved so I continue making extra payments on the principal it has become a game for me I look at the amoritization schedule and for each extra principal payment ( for me at this time under $100) I cut a month off the end of the loan and save a few hundred $ interest and since I can see it online it is instant gratification. I may take that tax rebate and take off a whole year. wouldn't that be cool..... I wish dh will have plans for his 1/2

**itlw8** · 02-29-2008, 11:03 AM

Originally Posted by Autumn1102

Does anyone know much about this? What is the point of it exactly? Does it lower your payments but make your mortgage longer? I know its a dumb question but I was wondering.

do you know what your interest rate is ? do you have a fixed rate or adjustable... if it is adjustable and you are not moving soon the refinancing to get a fixed rate is often wise.

What is the length of your loan and how many years into it are you?

**Autumn1102** · 02-29-2008, 01:58 PM

Originally Posted by itlw8

do you know what your interest rate is ? do you have a fixed rate or adjustable... if it is adjustable and you are not moving soon the refinancing to get a fixed rate is often wise.

What is the length of your loan and how many years into it are you?

My interest rate is 7.75 and it is a fixed rate. Our loan is 30 years and we are a little more than 8 years into it.

**heartofmine** · 03-01-2008, 02:52 AM

I can tell you what I do know. Interest rates are coming down right now. We just refinanced after 3 years on a 15 year loan. We had a fixed at 8% for 3 years and then it shot up to over 10% which is ridiculous right now for it to have gone up like that. We talked to the bank we had our loan at and they didn't want to talk to us much about it. Well my husband has a good friend at another bank on the board of directors and so he called him and we ended up talking to a lady there and got a fixed rate of 5.25% for the entire 15 years so we refinaced with them. We did end up borrowing more money, put central heat and air in plus a few home repairs, and enough with our income tax to find me a good used car. Also our yearly land taxes and house insurance will be divided and added in each month and our payments are still less than what they were going to be put up to at the other bank.

We are in much better shape than we were and as we had been doing a few home repairs for the last 3 years and put in the central heat and air our house was appraised for $20,000.00 more. We had only put about $7000.00 into it including the central heat and air so I think thats a pretty good return on our investment.

**M55FF** · 03-01-2008, 07:19 AM

Originally Posted by Autumn1102

Does anyone know much about this? What is the point of it exactly? Does it lower your payments but make your mortgage longer? I know its a dumb question but I was wondering.

refinacing will cost you some money... and you can negotiate the length of your loan to make it longer or shorter, but the loan starts all over again.
In some cases as mine was... it wasn't a good idea to refinance because I planned to pay off early.

The money it costs to refinance can be rolled back into the loan... you shouldnt do this ( refinance) unless you really read up on it and your sure its a good move for you.