Buying A Home
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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.
Just don't know what to do.
For the last 4 months or so my husband and I waiver back and forth trying to decide if we should refinance our house.( We know that we are able to and for a rate 2.25% better), We are 90% sure this is NOT our forever home and since the rates have been so low, we can see ourselves moving into our forever home in the next 4-8 years. So it would not make sense to refinance and pay 5-6K in closing costs, if we wouldn't recoup that in savings...right?
Part of me thinks,,,,but what if we don't move? We will be kicking ourselves that we didn't get such a better rate.
Ahhhhh I wish I could see into the future....... ;-) What would you do?
Re: Just don't know what to do.
We've done it - it's about 8 years to break even.
$5-6k in closing costs sounds like an awful lot for a refinance. I would shop around to see if you can get those costs down. Does that amount include some escrow charges for property taxes (where you would get a refund from your current escrow to offset that?)
And to break even in 8 years at a drop of 2.25% on your mortgage... is the balance super low? If I did the math right, you'd only be saving just over $50/month. If all those numbers are true, I wouldn't pay $5-6k to refinance and save $50 a month.
Then don't do it. Most often it is less than 2-3 years. That is too long to recoup the closing costs and only saving $110/mo.
For the numbers you posted (8 years to recoup at only $110 savings a month), unless you are willing to commit to living in your current home for the next 8+ years, it doesn't make sense to do it. If you move before your 8 years is up, you lost money on the deal which is counterproductive. If you weren't "90% sure" that you were going to move in 4-8 years, then I might think differently.
My Valentine Bookends (2~13~13, 2~15~09)
I'll throw out this idea: would you be in the position to refinance and then pourchase a new home after that? You could take advantage of the los rates for your refi and with the low low rates, purchase FHA (with as little as 3.5% down). This way you can have your cake and eat it, too since you'll hang on to your investment and let others rent it out and move in to you dream home with having utilized those rates?
My latest client did just this and it worked out for them nicely. Not sure what your financial position is, but it might work for you
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May I ask which bank gave you your last rates? Sometimes, a big bank will have low rates but they charge points...and those can be written off, too. Also, if you prefer not to share this info online, I'm at acmoyseos@gmail.com. I can't seem to change the email listed on this site for some reason.
Angele
Your rate is dropping 2.25% and you are only saving $110 a month? And they are charging you $5k-6k in closing costs? What the? Those numbers are not adding up. I would call around and get some more quotes.