ShouldI/When to refinance mortgage

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Thegame14
Posts: 1660
Joined: Mon May 07, 2018 11:53 am

ShouldI/When to refinance mortgage

Post by Thegame14 »

we are about 8 years into a 30 year fixed mortgage, at 4.25%, I saw another poster saying they can get 3.875%, we also have a HELOC variable around 4.99%. We owe about $270K on mortgage and about 30K on HELOC. When would it make sense to refinance and also in the process I assume wiping out the HELOC makes sense as well.

The house is valued around $475K. We both have 800 credit scores and income is around $150K
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Quirkz
Posts: 425
Joined: Mon Jan 14, 2019 5:32 pm

Re: ShouldI/When to refinance mortgage

Post by Quirkz »

Some broad rules of thumb include:
* if you can reduce by half a point or more
* if the refi savings pay for the costs within x (6-12? 18? sorry, I forget) months

Looking at numbers, it seems like you'd save close to half a point on the main loan and more than that on the HELOC. I'd bet it would be worth it. Definitely doesn't hurt to run some numbers.

I probably would roll the HELOC in, but since you're already 8 years into the loan I'd also encourage you to look at a 20-year loan, in order to maintain close to the existing payoff date and avoid extending it by another 8 years.
Topic Author
Thegame14
Posts: 1660
Joined: Mon May 07, 2018 11:53 am

Re: ShouldI/When to refinance mortgage

Post by Thegame14 »

Didn't know that they had 20 year loan, thought it was 30 or 15 years, thanks good to know. I will have to call B of A and ask.
KATNYC
Posts: 490
Joined: Fri Apr 07, 2017 4:34 pm

Re: ShouldI/When to refinance mortgage

Post by KATNYC »

We refinanced at 3.375% in 2017. We had an adjustable rate HELOC for renovations that kept increasing so it was worth it to us. We have a 10/ARM that will be paid off in 9.5 years.
aerosurfer
Posts: 235
Joined: Fri Feb 02, 2018 6:10 am

Re: ShouldI/When to refinance mortgage

Post by aerosurfer »

Thegame14 wrote: Tue Jul 02, 2019 11:55 am Didn't know that they had 20 year loan, thought it was 30 or 15 years, thanks good to know. I will have to call B of A and ask.
Dont feel the need to stay with your current bank or lender. Shop around, there are a likely better terms with other mortgage locations.

FWIW, I used Aimloan.com. they are a direct lender, had the best rates by far at the time, and delivered without any games, delays or bait and switch.

They offered many different loan types
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