Question about Mortgage.............(m)

iVillage Member
Registered: 04-07-2003
Question about Mortgage.............(m)
3
Thu, 06-19-2003 - 4:29pm
We got our first mortgage almost a year ago. My question is, do I have to wait a whole year until my mortgage comes up for renewal to re-mortgage? We have a ton of equity in the house and we want to pay off debt and we can borrow up to 95% of our appraised value.

Thanks

Laura

iVillage Member
Registered: 02-14-2003
Thu, 06-19-2003 - 6:09pm
Hi Laura. Mr Joe refinanced our mortgage just recently so we could have a lower rate. Our house appraised for $40K more than last year. Woohoo! I can't remember if he started the process before our first year was up.

The best board for your question is our Real Life Real Estate board. We have real estate and mortgage people there. :o)

http://messageboards.ivillage.com/iv-mlrealestate

Ms Joe

Ms Joe
CM Ms Joe Cool
Senior Community Moderator
moneylifecm@mail

iVillage Member
Registered: 03-26-2003
Thu, 06-19-2003 - 6:17pm
Hi Laura. I would think that you would be able to refinance a mortgage at anytime, regardless of when the loan originated. However, sometimes mortgage companies charge you a prepayment penalty (very common with short-term variable interest rate loans) if you pay your loan off before a certain amount of time has passed. The penalty is usually attached to the principal balance (amount that you currently owe) at the time the loan is paid off. This shouldn't prevent you from refinancing, but it will add on to the payoff amount which might make your loan amount a little higher in the end. Prepayment penalties vary from company to company, so it's best just to look in your original paperwork or call your mortgage company to see of there is a prepay penalty and how much it will be. We just refinanced our current mortgage and we only had it for seven months before we did a refi, so I do know that it is possible to refinance even before the one year mark has hit. But if you already know that you have a lot of equity in your home or if your current interest rate is high, then it might be worth to it to pay a prepay penalty in exchange for a lower interest rate and lower monthly payment.

HTH and best of luck!

Jill

iVillage Member
Registered: 04-22-2003
Fri, 06-20-2003 - 9:21pm
Mortgages don't come up for renewal on a yearly basis.

you get them for 15 or 30 yr.

You have either fixed or variable interest depending on what the market is at, at that time.

Pre payment penalties, check your amortization schedule make sure that there is no balloon payment I have seen a lot of these lately and people don't even know it is there till I pointed them out. Balloon payment is one lump payment like one friend has in 2 more years of 40,000 when you don't make it they auction off the house.

Pre payment willbe listed around that schedule if you have it I don't have a prepayment penalty, some companies do and some don't.

Check your interest on the loan if it is 6% and you can get 4.5% then go for it if not and it is only 1% point stay where your at it will cost more in closing costs than it is worth.

Another thing see if your company offers biweekly payment plan where you can pay half of your mortgage every two weeks and you make an extra house payment each yr. The extra payment goes to the principal and you pay off sooner on the house.

Some places charge up to 500 cheaper than refinancing considering you can probably pay off faster.

I don't know how much equity you have, but wouldn't use a second mortgage just for bills,

use a consolidation loan for that. Unsecured loan to pay off your bills and If one of them is the credit card then they take them and cut them up on the spot usually.

They didn't have to with us we already had them cut up.

hope that helps.