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Subject Author Date
Opinion KS 08-20-2006
---> Re: Opinion markloandr@gmai...08-21-2006
| ---> Re: Opinion Jeff Strickland08-22-2006
`--> Re: Opinion Jeff Strickland08-22-2006
Posted by KS on August 20, 2006, 6:32 pm
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 One mortgage company is offering to consolidate 1st mortgage,
2ndMort(line of credit), few credit cards into one loan without the
"Pre-payment" penalty at 7.95% fix for 30yrs.

The current situation is as follows:
1st mortgate at 5.10% 30yrfixed
2nd mortage(line of credit) at 9.10% variable (1.75%+ prime)
creditcards apr ranging from 11- 24.99%

Would it be beneficial to REFI at this point ? or just wait for another
few months (say 4months) where equity would be much higher and total
household income would be greater?

feedback appreciated.


Posted by Regal53 on August 20, 2006, 10:42 pm
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 The owed amounts have to be disclosed in order to compute the best loan.
Increased equity value or income is subject to change (decrease?) not fixed
guaranty.
> One mortgage company is offering to consolidate 1st mortgage,
> 2ndMort(line of credit), few credit cards into one loan without the
> "Pre-payment" penalty at 7.95% fix for 30yrs.
>
> The current situation is as follows:
> 1st mortgate at 5.10% 30yrfixed
> 2nd mortage(line of credit) at 9.10% variable (1.75%+ prime)
> creditcards apr ranging from 11- 24.99%
>
> Would it be beneficial to REFI at this point ? or just wait for another
> few months (say 4months) where equity would be much higher and total
> household income would be greater?
>
> feedback appreciated.
>



Posted by markloandr@gmail.com on August 21, 2006, 6:34 pm
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what is a couple monthes wait gonna do? There shouldn't be that much
change in equity and even if there is a huge increase in income we
still have to average over the last 2 years most of the time


Posted by Regal53 on August 22, 2006, 7:08 pm
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You got all the answers.
> what is a couple monthes wait gonna do? There shouldn't be that much
> change in equity and even if there is a huge increase in income we
> still have to average over the last 2 years most of the time
>



Posted by Jeff Strickland on August 22, 2006, 9:06 pm
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Well, no. He didn't get all of the answers.

The quick math is to add all of the current payments and come up with a
number. Then find out what the new mortgate payment will be (with all of the
other payments rolled it) and see if the new payment is lower than the
current payment. Odds favor that the new payment will be less. (I do not
like the new mortgage, the rate is very high. I think the OP should be
looking at a rate of around 6.250% ~ 6.500%, not a rate hovering at 8%.

The trick is to NOT take all of the avialable equity today -- or to take it
but put it somewhere that it can be accessed but do not access it. Then,
take the difference in the current payment and the new payment and set it
aside in some manner of saving vehicle. If your current payment is $2500,
and the new payment is $2000, then SAVE $50 each and every month.
Alternatively, pay $500 extra each and every month to the mortgage and pay
it off years ahead of schedule. The problem with this plan is that if you
NEED money down the road, it will be locked away in equity, forcing a
refinance to unlock it. If you have the discipline to save money, this is
arguably better than paying the mortgage off. If you haven't the discipline
to save, then throw the money at the mortgage and refi if needed.

I suggested taking the equity out now and settign it aside. My strategy is
that he might want to make property improvements where the improvement is
worth more than the cost, using equity dollars in this manner makes lots of
sense. Using equity dollars to buy good scotch and fine cigars is a VERY bad
idea.

In any case, take all of your credit cards except a Visa (or your favorite),
your American Express and the bank card where you keep your checking
account, and feed them to a shredder. You might go to dinner, but not have
$70 for the tab today, use the American Express and pay the tab at the end
of the month. Your TV might take a dump, and you have to get a new one, pull
out the Visa and pay the bill in 2 or 3 months, tops. When you need to get a
sack or two of groceries, pull out the bank card because it hits your
checking account right then.

The point is to get your Credit Life in order, and now that you have
transferred all credit to the mortgage, this is the best time to get the
credit moneky off your back.







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