Would you....(financial home/mortgage advice?)

Discussion in 'Random Ramblings' started by CowgirlPenny, Jul 26, 2011.

  1. CowgirlPenny

    CowgirlPenny Chillin' With My Peeps

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    Feb 17, 2011
    South East TN
    Refinance your house at a lower interest rate (3.5 would be the new rate, currently at 5), save $49 a month off your mortgage a month, get 1K back at closing, remove a second mortgage/lien (heat pump loan through TVA) on your house BUT tack on $12,000 to an $80,000 mortgage (that appraised for a SAD SAD $108,000 last week, less than when we bought it last May....still mad about that) Oh and Chase owns my mortgage and I HATE them. I'd be lying if I said I was not happy to be shopping else where (Wells Fargo) even if they sell us to someone else, anyone else is better than Chase.

    I'm SO afraid to do the refinance to save money now but in the long run really hurt us when we put it on the market spring 2013.

    If we refinance we HAVE to include our heat pump loan. It's a lien on the house. Originally I just wanted to do credit cards but we found out we could not do that, had to do the lien first and if there was anything left we could use that for credit cards. Sadly it only appraised for what I said and they will only finance 85% of the value, so that's roughly $92,000. Our heat pump is $6,900, their fees for refinancing, the small amount back bring us to a new mortgage of $92,000 and some change. It currently sits at $80,301. That's a big jump!

    I'm so torn. I need outside eyes and ears to chime in. Part of me feels like, just based on research, that the bank had a number in mind in their head. Enough to refinance us without giving us too much and the appraisal would have not changed that in anyway. I read three stories from June from three people in almost exact situations. They pressed and pressed and got the bank to increase the amount it appraised for. How can that happen unless they are deciding on their own the value? Everyone I talk to just cannot believe what it appraised for. We have several friends in real estate and they were shocked and said there was no way they would sell my house for under $119,900 MINIMUM. I'm realistic. I feel I keep up with the trends. So that's another thing. Banks are shady. I've given them $500 for an appraisal that I feel was worthless. They were going to determine what they would give us, they just needed the appraisal for legal reasons. That's my gut anyway...I guess I'm just having huge red flashing second thoughts and want to hear both sides.

    I don't want to be sucked into a loan that helps us a little now but really hurts us in the long run. My husband really wants to do it because that 1K or so helps us breath easier the rest of the fall, into winter AND it does remove the lien which is not a big deal to us but could be when we sell (even thought it would have to be paid off to close of course) I feel like if we do this refinance, we'll have to put big money from our tax return next year into money making improvements to try and raise the value more to counter our new amount we owe, which is a gamble. If the market tanks next year, we've done all these improvements on a house that is worth less than before we made those improvements.

    So, do we go for it, hope the market improves before we sell so we don't end up upside down (because of the new higher loan amount) , or walk away from this refinance and keep the lien on the house, but owe less?
     
  2. saddina

    saddina Internally Deranged

    May 2, 2009
    Desert, CA
    Quote:Note the bolded bits. You plan on selling in 2 years, the value is going down (it's not just yours dear), It seems you're asking if it's wise to refi now and then hope in two years it'll be all better, (and you want to put more $$$ into it). Would I? no your time window is too small to do it, and the chance that housing is going to fall yet again is realitivitly high (also, what is the job market there?, if the jobs are gone few people will be looking to buy there). I'd suggest sitting tight, keeping up with basic maintainance, but don't put in more $$ till you know which way the wind is blowing for sure.
     
  3. epignosisjs

    epignosisjs Chillin' With My Peeps

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    May 7, 2011
    Weeki Wachee, Florida
    x 2 So Sorry, dear, but the housing situation continues to get worse. We live on a deep water lagoon in Florida, 2 blocks from the Gulf. In the past 4 years we have added: a lanai, 12'x24' dock, seawall cap, tons of landscaping, pavers, retaining wall, privacy fence, AC, air handler, hot water heater, new driveway with additional parking, and a new roof. We are upside down by over $100,000 in the current housing market, NOT including the price of the improvements. [​IMG]
    Due to your time frame, I would put away the money for improvements until the market bounces back, rather than spend it on refinancing and improvements that may not pan out.
    Good luck!
    [​IMG]
     
  4. HHandbasket

    HHandbasket The Chickeneer

    Quote:FYI, as bad as Chase is, they are a joy to deal with in comparison to Wells Fargo. I think if you go through them, you'll wish you hadn't. That's just my 2 cents.
     
    Last edited: Jul 26, 2011
  5. HarlansHollowFarms

    HarlansHollowFarms bana-bhuidseach anns gára

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    Quote:Note the bolded bits. You plan on selling in 2 years, the value is going down (it's not just yours dear), It seems you're asking if it's wise to refi now and then hope in two years it'll be all better, (and you want to put more $$$ into it). Would I? no your time window is too small to do it, and the chance that housing is going to fall yet again is realitivitly high (also, what is the job market there?, if the jobs are gone few people will be looking to buy there). I'd suggest sitting tight, keeping up with basic maintainance, but don't put in more $$ till you know which way the wind is blowing for sure.

    [​IMG] Good advice.

    Also, if you are only saving $49/mo and tacking on $12000 to your principal you will not be saving any money in the long run because you will be paying your new lower intrest rate on the additional money.
    If you kept the house for 30 years, you would only save $17640 then tack on the $12000 plus the additional interest, (i am not sure how they figure it) but in my book, you will not be saving enough to justify all the spending involve in aquiring a refi. You have already spent $500 that it sounds like you needed for fall on an appraisal, remember, there will be more closing costs. You could just save that money and you would have the cash pay out of $1000.
     
  6. Spookwriter

    Spookwriter Overrun With Chickens

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    Ohio
    No, I would not refinance at this time based on the information you
    have provided for various reasons but mainly because of the current
    economics.

    A simple lesson I learned along the way :

    "You can't borrow your way out of debt."
     
  7. EweSheep

    EweSheep Flock Mistress

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    Land of Lincoln
    I agree with the others, do not refinance or improve the home. Sure you can spare some dollars to repaint your bathroom and some trim to make it look spiffy but it would be one at a time affording it. Its a BAD ecomony right now and everyone is getting jittery waiting for the results down to the wire on August 2nd.
     
  8. herefordlovinglady

    herefordlovinglady It Is What It Is

    Jun 23, 2009
    Georgia
    Quote:So true.... And all those credit companies, make you feel like they have the perfect answer to your problems.
     
  9. CowgirlPenny

    CowgirlPenny Chillin' With My Peeps

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    Feb 17, 2011
    South East TN
    I guess in my gut I have always had doubts. If the house had appraised for more, but we were still going to refinance the same amount, I would feel better about it. My husband just REALLY has never liked having the lien on the house, it bothers/worries him for some reason and he wanted to get rid of it. Sure that $1,000 back at closing would really help us but like I said, will it help in the long run? We had planned to do some improvements in the spring anyway. It would be nice if they helped with the value and not just countered the new balance on the loan.

    Now to explain to him that I don't want what I pushed on him to do in the first place....[​IMG]
     
  10. herefordlovinglady

    herefordlovinglady It Is What It Is

    Jun 23, 2009
    Georgia
    Quote:

    Better than eating crow later.....
     

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