5 yr interest individual ARM (100% financing Signed: 9/2006) - West LA - Refinance presently?
I have a couple questions.
First, I get a 5 yr interest only loan (80/20 100% financing) in September 2006. I live surrounded by El Segundo, California. (Westside of LA) I purchased my home for $740K. Zillow and other 'rough estimate sites' have it currently at $810K. Avg home prices in the nouns have dropped 5-10%. We think we will be contained by the home for at least another 3 years. Maybe 4-5 years. Given that, would refinancing to a fixed rate loan right now get sense? Any advice would be great.
Two: In the next 18-24 months we would call for to add a bedroom/bath (500 or so sq feet) onto our 2 bedroom/1.5 bath 1400sq ft cattle farm style home. We have plans drawn up and an estimate of $80K to do the one story add on. Should I dawdle to refinance until we need to start the remodel? If I take the architect approved plans into the guard, will the bank allow me to refinance for the current value of our home (1400 sq ft) + the estimated helpfulness of the addition (500 sq ft).
What's the smartest way to proceed?
Thanks
Answers:
Fixed Mortgage interest rates fell this week. Refinance! Get out of the ARM. Get out of interest only loan. At any time, they are terrifying, in this market they are recipe for disaster. It doesn't seem smart for you to be increasing your indebtedness right now. Take some personal nouns classes. If your house value declines, you will fall up owing more than the home is worth with your current loans as you are building up NO equity and have NO equity contained by home. Basically you're paying a very high rent to live contained by the house, and risking your credit.
It's much more difficult to get interest only and/or 100% loans right immediately. Underwriting has tightened up. Not sure you can swing the refi, and probably not the extra addition.
I might be able to give recommend on your first question. In Sept, you will have be in your home for 2 yrs, right? Does your loan have a prepay cost? We have a 80/20 loan for our home also which we bought in Sept, and it have a three year pre-pay penalty, so we can't refinance until this Sept where it will be three years. Anyway, if you don't afterwards if you know you can get a lower interest rate, I would start working on it in or around summer that channel it will be done by September so it will be at the two year mark.
Refinance and pay as much as you can on it to get some equity within the house. Then sell it and use the money to buy 10 houses in Michigan, southern Wisconsin or federal Illinois. Or buy one house and save & invest the rest. I am not kidding, we compensated less than 1/10th of that for our 1400 sq ft 2 bdr house. (Of course it's not in Southern CA but I can live near that.)
I would refi presently before the market drops and you hold equity problems.
YES! If you're eligible do it ASAP.
Part two - you're not going to close to my answer. I would not put more money in my house until I had money within the bank. If you can re-fi and save $40,000 a year afterwards you can put on that addition. You're neck wide in debt and want to take on more?
That's scare me.
Related Questions:
12 month Bank Statements for mortgage refinance?
I'm in recent times curious as to what I could expect to take for an interest rate on a refinance for my house?
Is very soon a flawless time to refinance a mortgage?
First, I get a 5 yr interest only loan (80/20 100% financing) in September 2006. I live surrounded by El Segundo, California. (Westside of LA) I purchased my home for $740K. Zillow and other 'rough estimate sites' have it currently at $810K. Avg home prices in the nouns have dropped 5-10%. We think we will be contained by the home for at least another 3 years. Maybe 4-5 years. Given that, would refinancing to a fixed rate loan right now get sense? Any advice would be great.
Two: In the next 18-24 months we would call for to add a bedroom/bath (500 or so sq feet) onto our 2 bedroom/1.5 bath 1400sq ft cattle farm style home. We have plans drawn up and an estimate of $80K to do the one story add on. Should I dawdle to refinance until we need to start the remodel? If I take the architect approved plans into the guard, will the bank allow me to refinance for the current value of our home (1400 sq ft) + the estimated helpfulness of the addition (500 sq ft).
What's the smartest way to proceed?
Thanks
Answers:
Fixed Mortgage interest rates fell this week. Refinance! Get out of the ARM. Get out of interest only loan. At any time, they are terrifying, in this market they are recipe for disaster. It doesn't seem smart for you to be increasing your indebtedness right now. Take some personal nouns classes. If your house value declines, you will fall up owing more than the home is worth with your current loans as you are building up NO equity and have NO equity contained by home. Basically you're paying a very high rent to live contained by the house, and risking your credit.
It's much more difficult to get interest only and/or 100% loans right immediately. Underwriting has tightened up. Not sure you can swing the refi, and probably not the extra addition.
I might be able to give recommend on your first question. In Sept, you will have be in your home for 2 yrs, right? Does your loan have a prepay cost? We have a 80/20 loan for our home also which we bought in Sept, and it have a three year pre-pay penalty, so we can't refinance until this Sept where it will be three years. Anyway, if you don't afterwards if you know you can get a lower interest rate, I would start working on it in or around summer that channel it will be done by September so it will be at the two year mark.
Refinance and pay as much as you can on it to get some equity within the house. Then sell it and use the money to buy 10 houses in Michigan, southern Wisconsin or federal Illinois. Or buy one house and save & invest the rest. I am not kidding, we compensated less than 1/10th of that for our 1400 sq ft 2 bdr house. (Of course it's not in Southern CA but I can live near that.)
I would refi presently before the market drops and you hold equity problems.
YES! If you're eligible do it ASAP.
Part two - you're not going to close to my answer. I would not put more money in my house until I had money within the bank. If you can re-fi and save $40,000 a year afterwards you can put on that addition. You're neck wide in debt and want to take on more?
That's scare me.
Related Questions: