[caren1775]

Hello
OK I would like to refi my mortgage , I have 8% now for 30 yrs. Owe 37,000 and 10,000 on a second.  my credit score is 635  and 4yrs out of bankruptcy, I have 2,000 in credit cared debt and owe 5,700 for my car. Which is 99.00 a mo ,  my mort  is 448 a mo that is piti..
The second is 125.00 a mo , so far my best offer is 6.75 for 30 yrs includes 1st and 2nd., car and all debt,, paymt would be 589 a mo and that includes 10,000 dollars for me cash.  ?? Should I do it?? :-/

[Gmoney]

Hi Caren:

Just look at the important pieces. What is your goal: to pay off as quickly as possible, to spend as little as possible (same as first; add up all the payments due over time for each scenario), to have low monthly payments, to have extra money today, etc.

Conventional wisdom is to pay off loans as quickly as possible which lowers the actual amount of money you spend. The juice (interest) you pay for other types of debt (car, credit cards) is usually much higher, so consolidating can look cheaper but it could actually cost you much more money because you pay the interest for so much longer.

How much time do you have on your current loans? If you have 22 years left on those loans and are now going to stretch them out to 30 years, then of course the monthly payments are going to go down, but now you are paying more interest over time. Always add up all the payments over time to see what the total cost of the loan will be.

The CASH in your hands is always a great temptation banks like to use to sell you more loans. Just remember, for every dollar you borrow for 30 years, you pay the bank back 3 times or more.

My suggestion would be, if you still have over 25 years left on your current loans, to consolidate your two mortgage loans into one, see if you can get a 15 year loan at a better rate and pay that off as quickly as possible. If this lowers your monthly payments, that leaves more to pay off the other debt.

Good Luck

[clover23]

hello
ok I would like to refi my mortgage , i have 8% now for 30 yrs. owe 37,000 and 10,000 on a second.  my credit score is 635  and 4yrs out of bankruptcy, I have 2,000 in credit cared debt and owe 5,700 for my car. which is 99.00 a mo ,  my mort  is 448 a mo that is piti..
the second is 125.00 a mo , so far my best offer is 6.75 for 30 yrs includes 1st and 2nd.,,,,, car and all debt ,,,,,, paymt would be 589 a mo and that includes 10,000 dollars for me cash.  ?????????? should i do it ????? :-/

You can refinance to better your financial position. I am a 5-yr mortgage consultant in Wisconsin, and you have to have a "net tangible benefit" in refinancing (i.e. be made better off) for your loan to pass underwriting standards. Why are you paying off a car and credit cars with a loan that is amortized (paid off) over 30 years? Of course your payments will be lower, but your debt commitment to these bills has now been EXTENDED! What are the TOTAL TRANSACTION COSTS in this refinancing? If you can't recoup your costs within 12 months. you need to look more closely at the benefits of this...

I would recommend refinancing to lower the mortgage financing costs (rate) and payments (since this is what we deal with monthly:) ). If you are not investing the $10,000 cash - by making home improvements or getting a better than 6.75% return on it (or making a substantial purchase or other goal), I question why you would INCREASE your DEBT. The tax advantage from including these debts in your mortgage may not exceed your standard deduction - consult a tax professional about this.

[larmbruster]

You should be able to get a better rate.. I am a mortgage banker and rates are A lot better than 6.75%

[stevetcg]

you should be able to get a better rate..I am a mortgage banker and rates are ALOT better than 6.75%

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