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  • February 17, 2008 at 4:53 PM #154964
    RolyPoly
    Participant

    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.

    February 17, 2008 at 6:03 PM #154617
    barnaby33
    Participant

    Why not take out an equity line against the home and use the equity line to payoff a potion of the first

    Two good reasons:
    HELOCs are recourse.
    HELOCs are callable.

    Josh

    February 17, 2008 at 6:03 PM #154993
    barnaby33
    Participant

    Why not take out an equity line against the home and use the equity line to payoff a potion of the first

    Two good reasons:
    HELOCs are recourse.
    HELOCs are callable.

    Josh

    February 17, 2008 at 6:03 PM #154916
    barnaby33
    Participant

    Why not take out an equity line against the home and use the equity line to payoff a potion of the first

    Two good reasons:
    HELOCs are recourse.
    HELOCs are callable.

    Josh

    February 17, 2008 at 6:03 PM #154894
    barnaby33
    Participant

    Why not take out an equity line against the home and use the equity line to payoff a potion of the first

    Two good reasons:
    HELOCs are recourse.
    HELOCs are callable.

    Josh

    February 17, 2008 at 6:03 PM #154903
    barnaby33
    Participant

    Why not take out an equity line against the home and use the equity line to payoff a potion of the first

    Two good reasons:
    HELOCs are recourse.
    HELOCs are callable.

    Josh

    February 17, 2008 at 8:57 PM #155049
    rbresident
    Participant

    I am in the same boat as Rolypoly. That is my current 5/1 Arm rate is 4.25% and is due to reset next year to 6.25%. My Loan-to-value is about 60% and I can afford the payment once it resets. I am considering getting a 30 years fixed with money out so that I can take advantage of the downturn in a few years. (You need some cash to do that, right?). I am not in a hurry to do anything right now since I got a full year to consider my option. Any suggestion. Is my plan stupid?

    February 17, 2008 at 8:57 PM #154671
    rbresident
    Participant

    I am in the same boat as Rolypoly. That is my current 5/1 Arm rate is 4.25% and is due to reset next year to 6.25%. My Loan-to-value is about 60% and I can afford the payment once it resets. I am considering getting a 30 years fixed with money out so that I can take advantage of the downturn in a few years. (You need some cash to do that, right?). I am not in a hurry to do anything right now since I got a full year to consider my option. Any suggestion. Is my plan stupid?

    February 17, 2008 at 8:57 PM #154948
    rbresident
    Participant

    I am in the same boat as Rolypoly. That is my current 5/1 Arm rate is 4.25% and is due to reset next year to 6.25%. My Loan-to-value is about 60% and I can afford the payment once it resets. I am considering getting a 30 years fixed with money out so that I can take advantage of the downturn in a few years. (You need some cash to do that, right?). I am not in a hurry to do anything right now since I got a full year to consider my option. Any suggestion. Is my plan stupid?

    February 17, 2008 at 8:57 PM #154957
    rbresident
    Participant

    I am in the same boat as Rolypoly. That is my current 5/1 Arm rate is 4.25% and is due to reset next year to 6.25%. My Loan-to-value is about 60% and I can afford the payment once it resets. I am considering getting a 30 years fixed with money out so that I can take advantage of the downturn in a few years. (You need some cash to do that, right?). I am not in a hurry to do anything right now since I got a full year to consider my option. Any suggestion. Is my plan stupid?

    February 17, 2008 at 8:57 PM #154971
    rbresident
    Participant

    I am in the same boat as Rolypoly. That is my current 5/1 Arm rate is 4.25% and is due to reset next year to 6.25%. My Loan-to-value is about 60% and I can afford the payment once it resets. I am considering getting a 30 years fixed with money out so that I can take advantage of the downturn in a few years. (You need some cash to do that, right?). I am not in a hurry to do anything right now since I got a full year to consider my option. Any suggestion. Is my plan stupid?

    February 17, 2008 at 9:10 PM #154976
    HLS
    Participant

    RBR, it’s not stupid, it’s just risky.

    Next year, you do not know any of the following with certainty:
    a)What the value of your house will be
    b)What interest rates will be
    c)What your credit score will be
    d)What your income situation will be
    e)What loan you will qualify for at that time

    You have had 4 years at a great low rate. You want to squeeze out one more year at that low rate. It’s your choice.

    If rates are one half % higher next year, you will refi into that rate for 30 years, for the sake of your lower rate for one last year. If they are lower, you win.

    Last summer, June ’07, conforming rates were about 1 full point higher than they are today. Rates are still very near historical lows. Many people have ARMS that are higher than 30 YR fixed rates today, and many people don’t have 30 YR fixed at below 6%.

    Rates can go up or down quickly, nobody has a crystal ball.

    ROLY, do you think that Countrywide is your only/best option ?

    February 17, 2008 at 9:10 PM #155054
    HLS
    Participant

    RBR, it’s not stupid, it’s just risky.

    Next year, you do not know any of the following with certainty:
    a)What the value of your house will be
    b)What interest rates will be
    c)What your credit score will be
    d)What your income situation will be
    e)What loan you will qualify for at that time

    You have had 4 years at a great low rate. You want to squeeze out one more year at that low rate. It’s your choice.

    If rates are one half % higher next year, you will refi into that rate for 30 years, for the sake of your lower rate for one last year. If they are lower, you win.

    Last summer, June ’07, conforming rates were about 1 full point higher than they are today. Rates are still very near historical lows. Many people have ARMS that are higher than 30 YR fixed rates today, and many people don’t have 30 YR fixed at below 6%.

    Rates can go up or down quickly, nobody has a crystal ball.

    ROLY, do you think that Countrywide is your only/best option ?

    February 17, 2008 at 9:10 PM #154676
    HLS
    Participant

    RBR, it’s not stupid, it’s just risky.

    Next year, you do not know any of the following with certainty:
    a)What the value of your house will be
    b)What interest rates will be
    c)What your credit score will be
    d)What your income situation will be
    e)What loan you will qualify for at that time

    You have had 4 years at a great low rate. You want to squeeze out one more year at that low rate. It’s your choice.

    If rates are one half % higher next year, you will refi into that rate for 30 years, for the sake of your lower rate for one last year. If they are lower, you win.

    Last summer, June ’07, conforming rates were about 1 full point higher than they are today. Rates are still very near historical lows. Many people have ARMS that are higher than 30 YR fixed rates today, and many people don’t have 30 YR fixed at below 6%.

    Rates can go up or down quickly, nobody has a crystal ball.

    ROLY, do you think that Countrywide is your only/best option ?

    February 17, 2008 at 9:10 PM #154963
    HLS
    Participant

    RBR, it’s not stupid, it’s just risky.

    Next year, you do not know any of the following with certainty:
    a)What the value of your house will be
    b)What interest rates will be
    c)What your credit score will be
    d)What your income situation will be
    e)What loan you will qualify for at that time

    You have had 4 years at a great low rate. You want to squeeze out one more year at that low rate. It’s your choice.

    If rates are one half % higher next year, you will refi into that rate for 30 years, for the sake of your lower rate for one last year. If they are lower, you win.

    Last summer, June ’07, conforming rates were about 1 full point higher than they are today. Rates are still very near historical lows. Many people have ARMS that are higher than 30 YR fixed rates today, and many people don’t have 30 YR fixed at below 6%.

    Rates can go up or down quickly, nobody has a crystal ball.

    ROLY, do you think that Countrywide is your only/best option ?

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