Asked by Mark Fidelman  |  Submitted December 29, 2014

If I have a 4.875% first loan at $635k and a $100k loan at 7% interest and the home is worth $1.3m - would you refinance now?

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  Answers  |  14

December 29, 2014

12/29/2014

Mark - thanks for the post / question

Yes - depending on your goals - refinancing is likely to be easily beneficial to do .....market rates are lower than 4.875% so if you want to lower rate to decrease payment - should be possible ( assuming you qualify) .....if you want to shorten the debt life- this could be possible too without much impact on payment amounts .....feel free to contact us for more detailed options

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 29, 2014

Thanks David, but we're over the conforming loan limit - so are Jumbo rates good enough? We also have 26 years left on the loan.

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 29, 2014

12/29/2014
Mark - thanks for the additional information ....what county are you in ? San Diego ? if so - high balance limit is $562,350 for 2015 I believe

Assuming you are interested in a new 30yr fixed rate loan ....these rates are in the high 3% to mid 4% range ( depending on fees/ costs ...so likely soem decent options to consider

key question - is the heloc / 2ndf mortgage a loan you took out when you purchase the home or is it one you took out after you alredy owned the home ??

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 30, 2014

There are several jumbo options available to close a $735,000 loan amount at lower rates. If you plan to stay long term and don't expect a $100,000 windfall it would be prudent to pay off the second as I guess is an ARM.

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 30, 2014

Caroline, it is an ARM but if I pay it off, I might as well buy down my first to a conforming loan, right?

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 30, 2014

If you happen to have $210,000 that you don't need and are self employed, paying down to high balance might make sense. However I always believe your money can work for you more than by paying down your primary residence. Assuming it is single family, you qualify, primary, value is $1,300,000 your middle FICO is 721+ and second was concurrent piggyback no cash out- 4.5% 30 year APR 4.601 is available for $ 735,000+/- . Not huge dip in rate on your first but gets rid of the risk of rates increasing

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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December 31, 2014

addiitonal ideas :
2 new loans to replace present loan - either make the new 1st mortgage the max high balance conforming amount or a new jumbo sized loan ......the new 2nd mtg would be in the 4.75%- 5.25% range

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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February 06, 2015

Short answer: yes. Whether you go to a jumbo or a new piggyback, your current rates are not competitive. If you haven't already pursued a refinance, it's time to do so.

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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July 08, 2015

I'll just add one final piece of information as I'm sure this situation has already been resolved, or would assume so based on the time that has passed by now. When refinancing, you should always do the math and 1) Make sure you're saving at least $250 per month on your monthly payment and 2) make sure you are recouping the cost of the loan within 2 years or less. Further, unless you want to lose the ability to earn interest on your money forever, don't throw cash to pay down a mortgage simply to refinance (unless some situation such as divorce, etc. forces you to). You're getting a double whammy on the lost opportunity costs on that cash as well as definitely not saving enough to recoup the costs of the loan (s). Home equity does exactly nothing for you in terms of earning power. Ultimately this decision can be a personal one but in terms of pure math, you're better off using dollars to earn interest and saving for retirement rather than paying down or off a mortgage.

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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August 11, 2015

Hi Mark,

No doubt there are lower interest rates and better terms available to you.

Do you need any additional cash out? Or are you looking to combine the 2 mortgages?

You have several options and we can review these in detail if you have time for a call.

Best,

Eric Nelson
408-268-2442
SVC Funding
eric@svcfunding.com

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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November 05, 2015

11/4/2015 Mark - are you still interested in refinancing the loans?

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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March 17, 2016

Mark: You should consider combining the 1st and 2nd Mortgages and refinance it for 15yeras at Interest rate below 3%. Substantial savings over the life of the loan. If you are willing and open to discuss in details what is the best option for you, please contact SUNTRADE FINANCIAL at 864-509-1700. We help professionals like you with their Family Financial Review.

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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May 24, 2016

Yes, if you haven't already. Consolidate your first and second and get something much lower in the three's and a 30 yr fixed

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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January 17, 2017

Mark - did you complete the refinance ?

$commenter.renderDisplayableName() | 01.19.17 @ 13:23

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