Money Matters
bmo88
member
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Mortgage Refinance: Is it worth it?
DH and I are considering refinancing, but aren't sure yet. Here's our situation:
Original Home Purchase: $268,000
Down Payment: $26,800 (10%)
To avoid PMI and get better interest rates, we chose an 80/10/10 loan set up:
1st Mortgage: $214,400 @ 4.37%
2nd Mortgage: $26,800 @ 5.99% Interest Only
Currently, we pay a total of $1,385 a month toward the first mortgage (minimum payment plus an additional $25). The minimum on our 2nd mortgage is $105 to cover the interest, but we pay an additional $500 toward principal to pay it down quickly. So we are paying $2,010 a month toward our mortgage ($545 above minimums).
We just bought our home last year, however, we are considering refinancing for a few reasons:
Pros:
- Our housing area has appreciated greatly. We have not done an appraisal yet, but many homes are appraising about 8-10% higher than last year.
- We are considering a 15 year mortgage because we can get a rate of 2.9%-3.1%
- It would save us over $130,000 in interest over the life of the loan
Cons:
- It would cost $4,500 to close on the new mortgage.
- Our new minimum monthly mortgage would be $1,900. Less than what we pay now, but doesn't give us the flexibility to go down to $1,500 if we needed to for some reason.
- We would need to ensure our home appraises at least $290,000 to avoid paying PMI and capitalize on the equity gain.
Have any of you considered or completed a refinance? What are your thoughts?
Re: Mortgage Refinance: Is it worth it?
Also, what is the interest rate difference between a 15 and 30 year loan? I personally really like that our mortgage payment is very easily affordable on just one of our incomes. Right now, we're focused on student loans, but I'll still ocassionally put a few extra dollars towards the principle, and when we have all of our student loans paid off we'll start channeling our money there, but in the meantime it's nice to have the breathing room.
And lastly, I could be wrong, but I'm not sure if the interest only 5.99% loan is really saving you much, even with the extra $500 you're putting towards it a month. Did you look at paying PMI upfront? It may have been a better deal.