Now I'm rethinking mortgages!

iVillage Member
Registered: 04-08-2008
Now I'm rethinking mortgages!
1
Fri, 07-19-2013 - 7:55pm

Our bank only offered us the posted rate last time we renewed our mortgage. I was livid bc the posted rates are NOT the rates. But we left it a little late to move it to another lender. And they probably knew this. So this time, I am going in there and playing hardball. If they don't give us at least 1% of the posted, I'm going to find a good mortgage broker. I have a few months!

But if I move, I'll have to pay off the LOC. I had rejected the idea of consolidated bc you pay way more interest in the long run. We'll just have to do that if we move lenders. And I am considering doing it anyway. We pay $960/mo plus another $600 on the LOC. We have 17 yrs left (we started with 30 yrs, 5 yrs ago but paid down). If we refi to 20 yrs, our combined payment will go to just under $1000. If we use the money for childcare, it will create a nice tax deduction we can use to pay down the principal each year.

The other reason for doing this is that with our present budget, we have NO extra money. If/when the car needs new brakes or the washer finally goes - we will have NO money for these things. Yes, we have an EF but we would have no way to replenish it. We had a bit of extra money in the spring and we bought pajamas for the boys like it was a big treat...what if DH didn't get that overtime? (and overtime is rare and goes in senority there)

So it would just give us some breathing room. And we are stressed out about it all. I have missed work twice bc of childcare issues. School will be done in 2015 and I can put all that tuition money on the principal then. If this degree pans out, I could be doubling my salary - if not, then at least I tried!

What do you think? Am I letting myself off the hook here?

Oh - the LOC is at 4% and the mortgage will be 2.94% (*or less!)

Dee

Community Leader
Registered: 08-25-2006
Mon, 07-22-2013 - 12:08pm

I used a mortgage calculator to see what the different scenarios looked like.  You are right that unless you put extra towards the principal you won't be saving money, but I think if you have a plan and can get a better interest rate, then go for it.

I have only purchased one house and refinanced in 2008.  It such a pain in the neck, and the only reason I am doing mine now is because it is this special HARP program.  No appraisal, no mortgage insurance (I am at around $115% loan to value) and they only need to verify I have a job.  Thats it.  It is only in my name, but I do get to put my DH on the title. 

You know how to do the math.  If the math plays out and it gives you some wiggle room, and your are up for it, then I say go for it. 

Serenity

Serenity