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Mortgage refinancing

Discussion in 'Money & Finance Forum' started by gridfaniker, Apr 2, 2003.

  1. Shrapnel

    Shrapnel Stinky

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    My trailer actually went down in value since I first bought it. But in just 257 more payments and it's all mine.
     
  2. Superfluous_Nut

    Superfluous_Nut pastor of muppets

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    i need to look at a refi. i've got a 7 3/8 loan with about 9 years left. i'm affraid that i can knock the payments down, but restarting the clock isn't always so great.

    for those that have, are you putting in principal at the same rate as before? like, the $200 or whatever you're not paying each month, is that $200 less in interest payments or $200 less in principal?
     
  3. gridfaniker

    gridfaniker Loathsome

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    I'm not sure, but I think the banks want you to finance in five-year increments, meaning you could either refinance for a 10-year or 5-year term. 10 wouldn't be so bad.
     
  4. Shrapnel

    Shrapnel Stinky

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    If you're not extending the term any, the difference in payments is all interest.

    :(
     
  5. barracuda

    barracuda Provocateur Extraordinair

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    I am just in the process getting my first house mortgage for 4.5 fixed for 5 years then variable for the remainder of 25 years. I'm not up on all the terms yet but I believe the variable won't be over 5.5 - 6%. It will cost me to lock in but I think it will be worth it.
     
  6. vpkozel

    vpkozel Professional Calvinballer

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    We got a 5/1 ARM at 4.25%. We don't plan on being inn our house for more than 5 years, so I didn't want to go for the 30 year, which was 5.375%.
     
  7. Superfluous_Nut

    Superfluous_Nut pastor of muppets

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    home loans are different from normal loans in that they are weighted to pay more interest at the beginning and less at the end. if i don't extend the time frame, will i still be paying principal at the same rate i am now?
     
  8. Patti

    Patti ~

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    If you are paying a lower monthly payment, just keep paying the same monthly amount you use to and 100% of that will be toward the principal and will knock a considerable amount off the length of your loan.

    My brother refinanced not long ago and took the option of paying twice a month. ( He gets paid twice a month ) And I honestly don't remember how much he told me saved by paying twice monthly but I remember being shocked.
     
  9. Shrapnel

    Shrapnel Stinky

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    No, home loans are the same as a car loan or whatever, just simple interest loans. You pay interest on the principal you have outstanding. As the principal decreases, the amount of interest accrued decreases, thus you pay more toward principal.

    Think about it...if you have a balance of $100,000 at 8% for 10 years and your payment is $1213/mo. If you refi. for a rate of 5.5% and keep the term at 10 years, your payment goes down to $1085/mo. You are still paying off the $100,000 principal in 10 years, so the difference in payment is all interest.
     
  10. Fred

    Fred .........

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    I am in the process now (as soon as I can get the appraisal done.) My interest rate is dropping almost 2% down to 5.75%. I am getting 10K back (paying off everything except the car and the house) and reducing my house payment by 12 bucks a month. I hear the rates are about to go up again.
     

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