My home is valued at $145K and I owe $2K on the mortgage. I owe a total of $5K on debts, credit cards etc. My interest rate is 7.5%
I would like to refinance for 15 yrs at a low rate for $20K
Answers | 5
One thing to consider in your thought process is that the interest rate might be higher for the simple fact that the mortgage amount is below $50,000 and would not be considered a prime mortgage for the lender (in other words, it would not be as advantageous to them as would a mortgage over $100,000, for example, so they will charge more for it).
Rather tan tell you what what someone thinks you want to hear, lets dig deeper into what no one else is asking.
Off the top of my head:
1) Your ability to pay a $20K mortgage over 15 yrs?
2) Why do you need $20k?
3) Have you considered a HELOC ?
4) Is the $5K in debt at a higher rate than 7.5%?
5) What does 15 yrs of debt financing offer your lifestyle needs today?
A 7.5% rate is above average but without knowing your situation (credit score, ability to pay, etc), It is difficult to give you a qualifying rate. So, keep in mind GIGO- Garbage In Garbage Out.
I can tell you that any decent Investment Manager can turn $20K into around $80K in 15 yrs. A better question could be, do you prefer equity or debt financing?
Hope this helps.
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