I’ve recently decided to seriously consider getting a home refinance loan. With home interest rates at their lowest in history, I feel like this is an opportunity I can’t afford to miss.
However, this might not be straightforward given how much I still owe on my house and its estimated value. I suspect many people are in a similar predicament and are curious about their options. Hopefully, this series of posts will be helpful for your own efforts.
Here are the specifics of my situation:
– I have a 30-year fixed-rate mortgage at 5.75%.
– My remaining mortgage balance is around $142,000.
– I’m unsure of my home’s current value, but my state tax estimate puts it at about $134,000.
– I am 7 years into my mortgage with no late payments or issues.
– I have a great credit rating.
Looking ahead, I think there are two main challenges I could face:
1. If my house is worth less than what I owe, I won’t qualify for good rates and a refinance wouldn’t be beneficial. If this happens, this series might end sooner than expected!
2. If my house is worth more than I owe but still has a high loan-to-value ratio, I need to consider the pros and cons. The biggest concern is paying a lot of PMI (private mortgage insurance). Even if my principal and interest payments are lower, high PMI could negate the benefits.
My journey will start with contacting banks and mortgage companies to see who’s willing to work with me given my situation. I’ll keep you updated as I make progress.
Go to the next chapter …
