Anybody have any advice on how/where to begin shopping? I purchased my home in 2003 for 113k with a 6.85% rate 30 year fixed; it's now valued at 199k (dropping). I know this is a broad question but thanks for any tips or site references about pitfalls I could encounter.
Rog
My local megabank is offering fixed home equity loans with relatively easy approvals and no closing costs (just the appraisal fee) for in the mid 5% range. If you are willing to take a bit of risk of risking rates, a variable H/E loan might be the way to go. My loan adjusted down to 3-1/8% recently. You could save on interest for a while, and then hope to refi into a decent fixed before the H/E loan adjusts higher down the line. Even if you don't refi, the low H/E rate would let you pay more principal, getting your balance down so that later, interest will be a much smaller factor overall.
-john-
Really??? For a mortgage, not a HEL? Care to mention the bank, please?
TIA
The last thing I would suggest is that one borrow at a variable rate right now. I would suggest the OP shop around and decide between a 30yr fixed or 15 yr fixed depending on the rate difference and his own comfort level. In normal times, a 15yr can be had for about 1/2% less, but of course the monthly payment higher.
At $113K, 6.85, payment was $740.44 After 6 yrs, the balance about $104,500
A new 30 yr at 5.25% = $577/mo A new 15yr at 4.75% = $813/mo
I like the idea of having the mortgage end sooner, depending on the rest of the op's situation. If there's a matched 401(k) account he's not maximizing, the $240 difference may be better off there. If his cash flow is tight, I'd say take the 30yr, but keep making the same monthly payment of $740, the extra $160 or so with help pay it off sooner.
Given his debt to equity is so low, I'd expect no issues getting a refi (with his other finances being in order, of course.)
USBank. It is a fixed rate fixed period home equity loan. Mortgages have a lower rate, but are harder to get.
-john-
Choices include (1) a bank or financial institution you have an account in, (2) an independent mortgage broker, (3) a web service. All three may give a preliminary rough quote right away. But then they ask for a bit of the fees up front, say a few hundred for the appraisal, as earnest money to get some commitment before they go deep into the paperwork. #1 may already have idea of your credit-worthiness and be a but more certain, while #2 has access to multiple lending sources and may get you a better price. Fees could vary several thousand dollars, so its important to get few quotes.
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