Advice on my Mortgage

Submitted by Padawan73 on Mon, 07/09/2007 - 16:53
Forums
Credit repair

I currently have a 30 year fixed mortgage. I have lived in my house for 9 years. My monthly payment is $500, and this includes home owners insurance and yearly property taxes. My mortgage rate is 7.78%. I would like to sell my home in 5 years and would like to owe as least or nothen on the home when I sell it. As of today the payoff is $40,000 ......What would be the best way to pay it off? Send additional payments each month to the principle, refinance and increase the montly payment or just wait the 5 years and most likely owe about $28,000 and pay off after I sell the house?? I have perfect credit and could receive a good loan.

Laura

Hi Padawan73,

Welcome to the forum,

As per your query i think that a mortgage refinance with a lower rate of interest will be a good option for you. This will help you pay off the existing mortgage in a shorter period of time.

I hope this helps you to take a decision.
Good Luck.

Tue, 07/10/2007 - 05:50 Permalink
carol

Hi Padawan,

You can always carry on with this mortgage plan and pay more towards the principle. You can continue with this mortgage payment and at the end of five years you can sell off your house and pay the rest of the amount easily.

In case you do a refinance you can get a lower interest rate and can pay a higher amount towards the principle. The advantage being that you got a lower rate of interest.

Both these are good options. You can choose any of them as per your convenience.

Tue, 07/10/2007 - 11:11 Permalink
anthony

Hi Padawan,

I would better stick to my present mortgage and pay more towards the principle. So by the end of 5 years i will have less than $28,000 to be paid. I will have that easily by selling off my house.

This is my choice ofcourse. Good luck

Thanks and Regards
Anthony

Tue, 07/10/2007 - 11:26 Permalink
John Morris

Hi Padawan,

Welcome to CreditMagic.
Carol and Laura has suggested you some good solutions. I just wanted to add something.

You have two good options:
1) Mortgage refinance and pay off (as Laura has suggested)
2) make additional payments each month (as you can afford it)

In option no.1, even though you may get better interest rate (owing to your perfect credit and negotiation skills), you will have to pay some processing charges and other fees. Moreover, these charges are often higher than expectation.

In option no.2, you follow the normal course and sell your house after five years.

If you can offset the closing costs with the interest savings per month, in these five years, then only you will benefit from refinancing. In addition, you should refinance if only the new mortgage rate is lower than the interest rate on the current mortgage loan.

From my perspective, making additional payments each month seems to be a better option.

Tue, 07/10/2007 - 12:01 Permalink
Charles (not verified)

Thank you everyone for taking time to comment on my mortgage question. Sounds like either way would work. I will discuss with my wife and make a decision by the end of the month.

Tue, 07/10/2007 - 21:53 Permalink
Laura

Hi Charles

Its really good to know that we have been of some help to you. Do discuss the matter with your wife and take a final decision.

We would be more than glad if you share your experience with us and let us know about your decision.

Wed, 07/11/2007 - 05:37 Permalink
anthony

Hey Charles,

Do keep us posted.

Thanks and Regards
Anthony

Wed, 07/11/2007 - 05:39 Permalink
carol

It feels great to know that we could help you to some extent.

Wed, 07/11/2007 - 05:43 Permalink
crorkz matz (not verified)

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Tue, 08/05/2014 - 14:15 Permalink