Refinancing

[Southern28Chick]

I'm refinancing my house. It's a no closing cost deal so the loan amount is more than the house is worth because the closing cost gets added to the loan amount. Has anyone here refinanced and regreted it? I always get cold feet about these things.

May interest rate will go down from 6.5% to 5.5%.

Edit: I'm refinancing to lower my monthly payments. I'm not getting extra money out.

 

[Frozen Feathers]

As long as it's a fixed rate, you should do good, 5.5 is a very good rate.

Are you remodeling?

 

[Cuban Longtails]

A friend of mine did that and regretted it, but he & his wife didn't use the money like he planned on. The bulk of it was used to pay off credit cards that just got charged up again. Messy, messy situation...

I think that if you don't have any thoughts on moving in the future and you have a good plan laid out on how you want to spend the money, then you won't regret it in the end.

 

[CarriBrown]

I've done that for home improvements. If your interest rate goes down and you use the money to put back in the house, I say, go for it!

 

[Southern28Chick]

I'm actually just refinancing to lower my monthly payment. I'm not getting any extra money out. The only thing added to the loan is the closing costs.

Oh, I forgot...it is a fixed rate.

 

[TransplantedTexan]

with that interest rate about the only way I see it could be bad is if you did not put the money back into the house.
It isn't a good idea to take money out of the house to pay off other debt, or buy other things. If you put it into the house in the right renovations, you usually wind up raising the property /resale value of the house by more than what you owe on the refi.

 

[Cuban Longtails]

Quote:
Well, in that case you'd just have to weigh the pros and cons. You're going to be paying less for a longer amount of time, vs. paying more for a shorter amount of time. Then again, the difference in the interest might make up for it.

 

[speckledhen]

With the "no money out" loan, then all you need to ask is if you are going to stay in the house long enough for the money you save every month to add up to the closing costs you are paying to refinance. After that point is when you actually start saving money.

 

[Galaxie_Man]

Quote:
Think about the term too. Are you starting over at a thirty year mortgage? DO NOT go for the forty or fifty year terms. Depending on how far along you are, starting over is not such a good idea unless you are really dropping your interest rate. The one time I re-financed, I dropped my rate over 2%, and was not quite 14 years into my 30 year term. We ended up selling the house anyway two years later for a profit. Then we started over on the new house with a 30 year at 5.5%, and as soon as Daddy's little princess is out on her own, we start making double payments.

 

[Frozen Feathers]

Not trying to hijack the thread, but what is the difference between getting a home equity loan and refinancing? Is one better then the other? DH and I want to remodel out kitchen next Spring, we don't plan on staying here for longer then 10 years, so what is our best bet??