Home › Forums › Closed Forums › Buying and Selling RE › Refinance now – or wait?
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November 27, 2007 at 8:40 PM #11004November 27, 2007 at 9:15 PM #104054
patientlywaiting
ParticipantHow is it possible to owe over $200,000 and yet have monthly mortgage payments in the $8xx range?
Sounds like your interest rate is pretty low already. Why refinance and pay more? Just keep on monitoring the market for changes you may benefit from.
If I were you, with the assumptions you’re making, I’d sell now.
November 27, 2007 at 9:15 PM #104199patientlywaiting
ParticipantHow is it possible to owe over $200,000 and yet have monthly mortgage payments in the $8xx range?
Sounds like your interest rate is pretty low already. Why refinance and pay more? Just keep on monitoring the market for changes you may benefit from.
If I were you, with the assumptions you’re making, I’d sell now.
November 27, 2007 at 9:15 PM #104140patientlywaiting
ParticipantHow is it possible to owe over $200,000 and yet have monthly mortgage payments in the $8xx range?
Sounds like your interest rate is pretty low already. Why refinance and pay more? Just keep on monitoring the market for changes you may benefit from.
If I were you, with the assumptions you’re making, I’d sell now.
November 27, 2007 at 9:15 PM #104181patientlywaiting
ParticipantHow is it possible to owe over $200,000 and yet have monthly mortgage payments in the $8xx range?
Sounds like your interest rate is pretty low already. Why refinance and pay more? Just keep on monitoring the market for changes you may benefit from.
If I were you, with the assumptions you’re making, I’d sell now.
November 27, 2007 at 9:15 PM #104153patientlywaiting
ParticipantHow is it possible to owe over $200,000 and yet have monthly mortgage payments in the $8xx range?
Sounds like your interest rate is pretty low already. Why refinance and pay more? Just keep on monitoring the market for changes you may benefit from.
If I were you, with the assumptions you’re making, I’d sell now.
November 27, 2007 at 9:29 PM #104208SD Realtor
ParticipantI think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
SD Realtor
November 27, 2007 at 9:29 PM #104191SD Realtor
ParticipantI think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
SD Realtor
November 27, 2007 at 9:29 PM #104164SD Realtor
ParticipantI think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
SD Realtor
November 27, 2007 at 9:29 PM #104149SD Realtor
ParticipantI think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
SD Realtor
November 27, 2007 at 9:29 PM #104064SD Realtor
ParticipantI think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
SD Realtor
November 27, 2007 at 10:33 PM #104159sdnerd
ParticipantThanks for the input.
I have a 5 year IO loan in the 4.x range – with a little over a year left before it adjusts, that’s why my current monthly is low.
I had considered dumping (should have last year). What’s always stopped me is if we move out and rent we are going to be spending ~20k/yr on rent. Effectively it’s depreciating at nearly the same amount my rent cost would be elsewhere.
I’m guessing I could dump the place today for $225-230k (maybe?). After fees, I’d basically walk away from the table not owing anything, but not leaving with anything either. Decent hit, but not too bad considering I’ve livered here ~4 years which helps ease the down payment loss pain.
If I live here another 2 years before buying (Dec ’09), that’s ~40k in rent. If 2 years turns to 3, that’s $60k… etc. If my bottom here is $180k, and I am going to live here at least another 1-2 years would it really make sense to bail now if I can only sell for $220k? Especially if I don’t need to sell to buy a new home. I can ride the market out on this 1 bedroom. (Part of the reason I bought a 1 bedroom to begin with)
There’s also a cost in moving out, then buying and having to move again should I buy a year or two later.
Also I agree that Dec ’08 will probably be early, so I’m leaning towards early ’09. But even then I do not expect that to be the bottom by any means. At the same time, after a few years into marriage it’d be nice to settle in a nice home. Especially if kids come into the picture in the next couple of years. Even if there is still another 10-15% correction left to go at that point – again there is cost in waiting, renting, etc.
Not an easy decision, and it’s been racking my brain.
November 27, 2007 at 10:33 PM #104173sdnerd
ParticipantThanks for the input.
I have a 5 year IO loan in the 4.x range – with a little over a year left before it adjusts, that’s why my current monthly is low.
I had considered dumping (should have last year). What’s always stopped me is if we move out and rent we are going to be spending ~20k/yr on rent. Effectively it’s depreciating at nearly the same amount my rent cost would be elsewhere.
I’m guessing I could dump the place today for $225-230k (maybe?). After fees, I’d basically walk away from the table not owing anything, but not leaving with anything either. Decent hit, but not too bad considering I’ve livered here ~4 years which helps ease the down payment loss pain.
If I live here another 2 years before buying (Dec ’09), that’s ~40k in rent. If 2 years turns to 3, that’s $60k… etc. If my bottom here is $180k, and I am going to live here at least another 1-2 years would it really make sense to bail now if I can only sell for $220k? Especially if I don’t need to sell to buy a new home. I can ride the market out on this 1 bedroom. (Part of the reason I bought a 1 bedroom to begin with)
There’s also a cost in moving out, then buying and having to move again should I buy a year or two later.
Also I agree that Dec ’08 will probably be early, so I’m leaning towards early ’09. But even then I do not expect that to be the bottom by any means. At the same time, after a few years into marriage it’d be nice to settle in a nice home. Especially if kids come into the picture in the next couple of years. Even if there is still another 10-15% correction left to go at that point – again there is cost in waiting, renting, etc.
Not an easy decision, and it’s been racking my brain.
November 27, 2007 at 10:33 PM #104218sdnerd
ParticipantThanks for the input.
I have a 5 year IO loan in the 4.x range – with a little over a year left before it adjusts, that’s why my current monthly is low.
I had considered dumping (should have last year). What’s always stopped me is if we move out and rent we are going to be spending ~20k/yr on rent. Effectively it’s depreciating at nearly the same amount my rent cost would be elsewhere.
I’m guessing I could dump the place today for $225-230k (maybe?). After fees, I’d basically walk away from the table not owing anything, but not leaving with anything either. Decent hit, but not too bad considering I’ve livered here ~4 years which helps ease the down payment loss pain.
If I live here another 2 years before buying (Dec ’09), that’s ~40k in rent. If 2 years turns to 3, that’s $60k… etc. If my bottom here is $180k, and I am going to live here at least another 1-2 years would it really make sense to bail now if I can only sell for $220k? Especially if I don’t need to sell to buy a new home. I can ride the market out on this 1 bedroom. (Part of the reason I bought a 1 bedroom to begin with)
There’s also a cost in moving out, then buying and having to move again should I buy a year or two later.
Also I agree that Dec ’08 will probably be early, so I’m leaning towards early ’09. But even then I do not expect that to be the bottom by any means. At the same time, after a few years into marriage it’d be nice to settle in a nice home. Especially if kids come into the picture in the next couple of years. Even if there is still another 10-15% correction left to go at that point – again there is cost in waiting, renting, etc.
Not an easy decision, and it’s been racking my brain.
November 27, 2007 at 10:33 PM #104075sdnerd
ParticipantThanks for the input.
I have a 5 year IO loan in the 4.x range – with a little over a year left before it adjusts, that’s why my current monthly is low.
I had considered dumping (should have last year). What’s always stopped me is if we move out and rent we are going to be spending ~20k/yr on rent. Effectively it’s depreciating at nearly the same amount my rent cost would be elsewhere.
I’m guessing I could dump the place today for $225-230k (maybe?). After fees, I’d basically walk away from the table not owing anything, but not leaving with anything either. Decent hit, but not too bad considering I’ve livered here ~4 years which helps ease the down payment loss pain.
If I live here another 2 years before buying (Dec ’09), that’s ~40k in rent. If 2 years turns to 3, that’s $60k… etc. If my bottom here is $180k, and I am going to live here at least another 1-2 years would it really make sense to bail now if I can only sell for $220k? Especially if I don’t need to sell to buy a new home. I can ride the market out on this 1 bedroom. (Part of the reason I bought a 1 bedroom to begin with)
There’s also a cost in moving out, then buying and having to move again should I buy a year or two later.
Also I agree that Dec ’08 will probably be early, so I’m leaning towards early ’09. But even then I do not expect that to be the bottom by any means. At the same time, after a few years into marriage it’d be nice to settle in a nice home. Especially if kids come into the picture in the next couple of years. Even if there is still another 10-15% correction left to go at that point – again there is cost in waiting, renting, etc.
Not an easy decision, and it’s been racking my brain.
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