Was able to finally buy a house 2yrs ago after my credit was absolutely ruined in my divorce in 2011. Purchase price was 226k at 4.375. At the time rates were just starting to come back up and I was kind of disappointed I didn't get in under 4. My payment is $1450/mo.
So 2yrs later we owe 214k. The good news is the house would now appraise for over $250k. My wife sent me an article a week or so ago that said rates took a large, unexpected dive. So I got to thinking I wonder if I can refinance?
In a nutshell, I got ahead of Quicken Loans and have a loan estimate for a new 25yr loan, it would keep our monthly payment about the same, $1466, would actually add 3k onto the loan bringing it back to $217k, rate would be 3.875.
I went to bed last night thinking it was a good idea, but this morning I wake up and I'm not so sure.
So when we got the house I used a local mortgage company that was fantastic. I'd already been turned down by 2 big banks because my scores were not high enough for them. But about 3 months after we closed that company sold our loan to another servicer. I contacted the guy I delt with here locally for some advice. He said he did not recommend the refinance, but had I considered going conventional to eliminate PMI. I have no idea what it would take to qualify for a conventional loan, one thing is we simply do not have any available cash on hand to pay thousands of dollars to close. I was hoping maybe we could use some of the equity in the house to cover whatever closing costs would be associated with a conventional, assuming I can even qualify (scores just below 700, but alot of new credit cards in the last year or 2 + another deft consolidation loan in my name)
So, on the surface, going from 4.375 to 3.875, keeping virtually the same payment, chopping off 3yrs of the mortgage (28 left to 25) which by the math would save over $52k in payments in the next 3yrs, it seems like a great deal. But am I missing something? Wife is very wary of doing this.
