Advice on my 5/1 ARM Reset

[barnaby33]

Fixed rate mortgages probably aren’t going to get much lower. Especially as congress plays the stimulus game. 30 year fixed mortgages are somewhat loosely tied to the 10 year treasury bond. As congress tries to play the bailout game the bond market will raise rates to compensate for the freshly printed doleros. Hence it is more than likely, though not guaranteed, that Mortgage rates are going up.

HLS correct me if I’m wrong but I believe that refinancing from one first mortgage into another causes the borrower to lose their non-recourse status. For this person it doesn’t sound like a huge deal, I just wanted confirmation.

Josh

[HLS]

Josh,
You are correct…
A refi is a refi, regardless of whether any cash is taken out or not.

ONLY a purchase loan that is used to acquire the property has NON-recourse status.

30 YR fixed rates were below 5% for about an hour on Jan 23rd. They ended that day at 5.375%, an unbelievable, unprecedented move.
There was a window of opportunity to lock for about an hour, then it moved up quickly. It was chaos.

I cannot predict rates…

Desperate times call for desperate measures, and the govt is desperate,,, VERY desperate.

[HLS]

Josh,
You are correct…
A refi is a refi, regardless of whether any cash is taken out or not.

ONLY a purchase loan that is used to acquire the property has NON-recourse status.

30 YR fixed rates were below 5% for about an hour on Jan 23rd. They ended that day at 5.375%, an unbelievable, unprecedented move.
There was a window of opportunity to lock for about an hour, then it moved up quickly. It was chaos.

I cannot predict rates…

Desperate times call for desperate measures, and the govt is desperate,,, VERY desperate.

[HLS]

Josh,
You are correct…
A refi is a refi, regardless of whether any cash is taken out or not.

ONLY a purchase loan that is used to acquire the property has NON-recourse status.

30 YR fixed rates were below 5% for about an hour on Jan 23rd. They ended that day at 5.375%, an unbelievable, unprecedented move.
There was a window of opportunity to lock for about an hour, then it moved up quickly. It was chaos.

I cannot predict rates…

Desperate times call for desperate measures, and the govt is desperate,,, VERY desperate.

[HLS]

Josh,
You are correct…
A refi is a refi, regardless of whether any cash is taken out or not.

ONLY a purchase loan that is used to acquire the property has NON-recourse status.

30 YR fixed rates were below 5% for about an hour on Jan 23rd. They ended that day at 5.375%, an unbelievable, unprecedented move.
There was a window of opportunity to lock for about an hour, then it moved up quickly. It was chaos.

I cannot predict rates…

Desperate times call for desperate measures, and the govt is desperate,,, VERY desperate.

[HLS]

Josh,
You are correct…
A refi is a refi, regardless of whether any cash is taken out or not.

ONLY a purchase loan that is used to acquire the property has NON-recourse status.

30 YR fixed rates were below 5% for about an hour on Jan 23rd. They ended that day at 5.375%, an unbelievable, unprecedented move.
There was a window of opportunity to lock for about an hour, then it moved up quickly. It was chaos.

I cannot predict rates…

Desperate times call for desperate measures, and the govt is desperate,,, VERY desperate.

[Raybyrnes]

Why not take out an equity line against the home and use the equity line to payoff a potion of the first. Right now with good credit you could probably find Prime minus a point on long term and probably lower during some of the introductory periodss.

Pleae be aware that this strategy carries a cerai amount of risk as rate could go back up.

[Raybyrnes]

Why not take out an equity line against the home and use the equity line to payoff a potion of the first. Right now with good credit you could probably find Prime minus a point on long term and probably lower during some of the introductory periodss.

Pleae be aware that this strategy carries a cerai amount of risk as rate could go back up.

[Raybyrnes]

Why not take out an equity line against the home and use the equity line to payoff a potion of the first. Right now with good credit you could probably find Prime minus a point on long term and probably lower during some of the introductory periodss.

Pleae be aware that this strategy carries a cerai amount of risk as rate could go back up.

[Raybyrnes]

Why not take out an equity line against the home and use the equity line to payoff a potion of the first. Right now with good credit you could probably find Prime minus a point on long term and probably lower during some of the introductory periodss.

Pleae be aware that this strategy carries a cerai amount of risk as rate could go back up.

[Raybyrnes]

Why not take out an equity line against the home and use the equity line to payoff a potion of the first. Right now with good credit you could probably find Prime minus a point on long term and probably lower during some of the introductory periodss.

Pleae be aware that this strategy carries a cerai amount of risk as rate could go back up.

[RolyPoly]

Guys, thank you so much for your responses. To answer your comments:

I was planning on waiting until summer because it didn’t occur to me to refinance before the end of my 5-year ARM. Yes, I know that was just dumb of me. I didn’t realize that rates had already gone down and started to climb back up. I’ll pay more attention to Countrywide’s monthly “Refinance Now!” mailings.

I was considering taking money out of the house because, as Arty surmised, the house is worth a lot more than 200K. My friends say that I’m too young to have a house with 80% equity. They suggest I take money out of the house and invest it. But I don’t think there are any investments that will offset the interest on the mortgage or the sleepless nights I’d have worrying about loosing the roof over my head.

I do understand that paying off my house is a very conservative plan but it is very comfortable. As I stated initially, I can easily afford my current mortgage and still have money for savings and fun. I know I can save enough in the next few years to pay off the balance and have money for an emergency fund.

Raybyrnes, I’m not sold on the idea of taking out a home equity line of credit. That would mean that I still have my first mortgage but now tack on a second. If paying off the full first mortgage will put a squeeze on me, then how would I pay two mortgages?

Barnaby33, what do you mean by ‘the borrower to lose their non-recourse status’? What does that mean? Is there a drawback to paying off my mortgage? And HLS you remark about desperate times? How can the government increasing rates help those people who are in housing trouble? Perhaps I haven’t learned as much from you as I need to.

It seems that the best plan is to refinance for another 5 year ARM at the best rate I can get. Then I should focus my resources on saving as much money as I can to pay off the full balance in the next 5 years. Is there a downside to this plan other than being unnecessarily conservative?

Also, should I pay off the house in chunks over the 5 years or pay it all off at the end? Should I pay down some more of the balance when I refinance?

Thanks again for your all sound advice.

[RolyPoly]

Guys, thank you so much for your responses. To answer your comments:

I was planning on waiting until summer because it didn’t occur to me to refinance before the end of my 5-year ARM. Yes, I know that was just dumb of me. I didn’t realize that rates had already gone down and started to climb back up. I’ll pay more attention to Countrywide’s monthly “Refinance Now!” mailings.

I was considering taking money out of the house because, as Arty surmised, the house is worth a lot more than 200K. My friends say that I’m too young to have a house with 80% equity. They suggest I take money out of the house and invest it. But I don’t think there are any investments that will offset the interest on the mortgage or the sleepless nights I’d have worrying about loosing the roof over my head.

I do understand that paying off my house is a very conservative plan but it is very comfortable. As I stated initially, I can easily afford my current mortgage and still have money for savings and fun. I know I can save enough in the next few years to pay off the balance and have money for an emergency fund.

Raybyrnes, I’m not sold on the idea of taking out a home equity line of credit. That would mean that I still have my first mortgage but now tack on a second. If paying off the full first mortgage will put a squeeze on me, then how would I pay two mortgages?

Barnaby33, what do you mean by ‘the borrower to lose their non-recourse status’? What does that mean? Is there a drawback to paying off my mortgage? And HLS you remark about desperate times? How can the government increasing rates help those people who are in housing trouble? Perhaps I haven’t learned as much from you as I need to.

It seems that the best plan is to refinance for another 5 year ARM at the best rate I can get. Then I should focus my resources on saving as much money as I can to pay off the full balance in the next 5 years. Is there a downside to this plan other than being unnecessarily conservative?

Also, should I pay off the house in chunks over the 5 years or pay it all off at the end? Should I pay down some more of the balance when I refinance?

Thanks again for your all sound advice.

[RolyPoly]

Guys, thank you so much for your responses. To answer your comments:

I was planning on waiting until summer because it didn’t occur to me to refinance before the end of my 5-year ARM. Yes, I know that was just dumb of me. I didn’t realize that rates had already gone down and started to climb back up. I’ll pay more attention to Countrywide’s monthly “Refinance Now!” mailings.

I was considering taking money out of the house because, as Arty surmised, the house is worth a lot more than 200K. My friends say that I’m too young to have a house with 80% equity. They suggest I take money out of the house and invest it. But I don’t think there are any investments that will offset the interest on the mortgage or the sleepless nights I’d have worrying about loosing the roof over my head.

I do understand that paying off my house is a very conservative plan but it is very comfortable. As I stated initially, I can easily afford my current mortgage and still have money for savings and fun. I know I can save enough in the next few years to pay off the balance and have money for an emergency fund.

Raybyrnes, I’m not sold on the idea of taking out a home equity line of credit. That would mean that I still have my first mortgage but now tack on a second. If paying off the full first mortgage will put a squeeze on me, then how would I pay two mortgages?

Barnaby33, what do you mean by ‘the borrower to lose their non-recourse status’? What does that mean? Is there a drawback to paying off my mortgage? And HLS you remark about desperate times? How can the government increasing rates help those people who are in housing trouble? Perhaps I haven’t learned as much from you as I need to.

It seems that the best plan is to refinance for another 5 year ARM at the best rate I can get. Then I should focus my resources on saving as much money as I can to pay off the full balance in the next 5 years. Is there a downside to this plan other than being unnecessarily conservative?

Also, should I pay off the house in chunks over the 5 years or pay it all off at the end? Should I pay down some more of the balance when I refinance?

Thanks again for your all sound advice.

[RolyPoly]

Guys, thank you so much for your responses. To answer your comments:

I was planning on waiting until summer because it didn’t occur to me to refinance before the end of my 5-year ARM. Yes, I know that was just dumb of me. I didn’t realize that rates had already gone down and started to climb back up. I’ll pay more attention to Countrywide’s monthly “Refinance Now!” mailings.

I was considering taking money out of the house because, as Arty surmised, the house is worth a lot more than 200K. My friends say that I’m too young to have a house with 80% equity. They suggest I take money out of the house and invest it. But I don’t think there are any investments that will offset the interest on the mortgage or the sleepless nights I’d have worrying about loosing the roof over my head.

I do understand that paying off my house is a very conservative plan but it is very comfortable. As I stated initially, I can easily afford my current mortgage and still have money for savings and fun. I know I can save enough in the next few years to pay off the balance and have money for an emergency fund.

Raybyrnes, I’m not sold on the idea of taking out a home equity line of credit. That would mean that I still have my first mortgage but now tack on a second. If paying off the full first mortgage will put a squeeze on me, then how would I pay two mortgages?

Barnaby33, what do you mean by ‘the borrower to lose their non-recourse status’? What does that mean? Is there a drawback to paying off my mortgage? And HLS you remark about desperate times? How can the government increasing rates help those people who are in housing trouble? Perhaps I haven’t learned as much from you as I need to.

It seems that the best plan is to refinance for another 5 year ARM at the best rate I can get. Then I should focus my resources on saving as much money as I can to pay off the full balance in the next 5 years. Is there a downside to this plan other than being unnecessarily conservative?

Also, should I pay off the house in chunks over the 5 years or pay it all off at the end? Should I pay down some more of the balance when I refinance?

Thanks again for your all sound advice.

[Author]

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