we owe 210,000 on our home currently on an arm at 4% /- interest, we could put another 100k on the principle and refi at 3.25% to cut our current

Asked by Patti, Boulder City, NV Fri Aug 27, 2010

monthly payment in half, we are wondering if this would be wise move? we are both retired.

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Mon Aug 30, 2010
Hi Patti,

I recommend that you speak to your financial adviser.
It's probably not a good idea to put an additional 100K in to your home at this point considering values continue to decline. If you can refinance out of the arm to a fixed without paying down the principle so much it may make sense.

Are you looking at another ARM?
3.25% must be an ARM rate.
1 vote
Sameer Punja…, Agent, Vallejo, CA
Mon Aug 30, 2010
I mean, 4% is already really low to borrow money. I would rather have you use that 100K to invest in a rental property right, and you can easily earn 17-20% on your money if you play your cards right.

Also, that 100K how much will you have left over in your savings?

You should probably consult a financial advisor cause each situation is different. You can even call Bob Brinker up at MoneyTalk on Sunday afternoons 1:00PM, his # is -800-934-2221 He's will give you free advice.

Good Luck

Web Reference:  http://www.mygpsagent.com
0 votes
Chris Covalle…, , Chicago, IL
Mon Aug 30, 2010
Hi Patti, who is your current loan servicer? Maybe you can look at doing a streamlined refi thru the lender and not have to pay down the loan etc. to accomplish the rate reduction? Comments below are appropriate regarding placing additional reserves into the home-without knowing your particular situation if you need money down the road this cash may be not be accessible unless a home sale/cash out refinance/line of credit is pursued. I work for Bank of America so please advise if you have any additional questions for me-I can research your loan info and options if w/ Bank of America. Thx.
0 votes
A Gonz, Agent, Walnut Creek, CA
Sat Aug 28, 2010
Depends, depends; Keep in mind your property appraised value, original purchase price, your equity position, the terms of the ARM etc. 30 year fixed rates for folks with excellent credit and ability to repay are around 4%. Closing costs should be your main concern to make sure that the refi would make sense for your situation. Don't forget the ARM will adjust sooner than later and that rates may not be in the same range.
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0 votes
Debby Thomps…, Agent, Wauwatosa, WI
Fri Aug 27, 2010
It is what is best for you. Maybe I would start with your accountant. They may be able to give you the pros and cons. They would know more about your situation then I do. It is hard to give someone blind advise when we don't know all about your situation. We don't know how many years this loan is for? We don't know how many years you have left on your loan? Lots of questions.

Debby Homestead Realty Inc
0 votes
Ryan Smith, Agent, Murrieta, CA
Fri Aug 27, 2010
Hi Patti,

Your situation is unique in that your already retired. This could be money you may need in the future if something comes up. Rates don't appear to be going anywhere for a while but now is an awesome time to lock in a great rate. You may want to Refi but not put so much money down in case you need it later. Talk to a mortgage professional in your area about the Pros and Cons.

Good Luck
Chris Blasic
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