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12-19-2012 at 9:52 PM
pammieface
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Joined on 03-01-2007
Lancaster County, Pennsylvania
556 Posts
926 Points
pammieface is not online. Last active: 05-24-2013, 2:05 PMBronze

refinancing...need help

we are currently living in a house we bought about 7.5 years ago.  i didn't plan on living here forever...it's a duplex, our neighbors are weird, we're on a busy street, etc.  it's not awful, but i would love to someday build our own house and live somewhere else close by this area.  every time i look on zillow, the value of this house has gone down, though, so selling it now would be stupid.  

we have been approved to refinance, but i know very little about any of this. which of these is the best option, in your opinion?

(this is a "home equity installment loan for the purposes of refinancing")

loan amount: $108,000

OPTION A (currently doing this): 211 months, 5.875% interest, $995/mo. (includes taxes and homeowner's insurance)

OPTION B: 140 months, 3.39% interest, $941/mo. (not including taxes or homeowner's insurance)

OPTION C: 161 months, 3.59% interest, $851/mo. (not including taxes or homeowner's insurance)

OPTION D: 216 months, 3.59% interest, $684/mo. (not including taxes or homeowner's insurance)

OPTION E: 302 months, 4.29% interest, $589/mo. (not including taxes or homeowner's insurance) 

homeowner's insurance is an estimated $435 per year.

taxes are an estimated $2,500 per year.

any help would be appreciated.  i'm going cross-eyed looking at this stuff.
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12-20-2012 at 9:15 AM
Sisugal
Top 150 Contributor
Joined on 01-07-2007
19,331 Posts
5,057 Points
Sisugal is not online. Last active: 05-12-2013, 8:53 AMPlatinum

A home equity loan is not a refinance - it is borrowing against the equity in your home, but perhaps someone else can clarify this as I have never heard of this kind of refinance.

Do you qualify for a HARP 2 refinance?

All of the rates above are high -  why?  Your FICO scores?  Other debt load? What is your current interest rate and what kind of original mortgage did you get (30 year fixed, ARM, etc. ?

I would read Mortgages for Dummies to educate yourself on mortgages.

 
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12-21-2012 at 9:01 AM
pammieface
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Joined on 03-01-2007
Lancaster County, Pennsylvania
556 Posts
926 Points
pammieface is not online. Last active: 05-24-2013, 2:05 PMBronze

we don't have any debt except for college loans, which we will be finished paying off in a few months.  our credit scores are both around 800.  our current interest rate is the first one listed--5.875%--which we got when we bought the house and had no idea what we were doing.  i didn't realize these rates were high, because they're all so much lower than that.  the 5.875% is a 30 year fixed.

like i said, any information is helpful, so thanks! 
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12-31-2012 at 9:29 AM
oxj7822
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Joined on 11-26-2011
1 Posts
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oxj7822 is not online. Last active: 04-03-2013, 12:05 PMNewbie
This is no brainer! Option B is the best for you. Lowest load duration and lowest interest rate is what you want. This one will cost you the least! Now, bank's objection here is opposite from yours. Bank is in a business of making money. They will try to tell you that you might want to go with a longer loan duration to have more free spending money. If you can afford it, do it. 
 
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