I have a mortgage for about $68,000 at 6.875% 30 year fixed and an auto…

Credit and mortgage advice Forums Home Mortgage I have a mortgage for about $68,000 at 6.875% 30 year fixed and an auto…

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    • #200920

      …loan for $10,000. Should I refinance? I would like to consolidate and make only 1 payment per month (which is ideally less than my current combined two payments). Is now a good time to refinance? I would consider a 7 year ARM to get a lower rate since I plan on selling my home when I am finished with grad school.

    • #259820

      I believe you should wait until after the election. But before the winner takes office. With rampant deficits over the last 30 years, it is possible hyper-inflation could result. I’m not a fear monger so don’t think it. The Fed, at some near point, must lower interest rates to regenerate stability in the economy. Then, a massive increase, to regulate, and recapitulate bond, and interest rate futures. Just to make sure everybody is shaken out who caused this mess.

      So, to answer, wait. Interest rates are going lower. Go fixed on the mortgage, trust me. Rates are going to be higher in 36 months.

    • #263373

      I’ve been in the mortgage business forever so I and my kind would benefit if I told you yes, but no. Don’t refinance.

      Firstly, ARM rates are currently higher than Fixed because of volatility with the LIBOR. Second, unless you are having major money problems NEVER finance an auto loan in to your mortgage. Sure it would be nice having only one bill but your turning your car loan in to a 30-year debt.

      Finally, If you refinance now for a rate of say, 6% you are going to need to pay that payment for close to 5 years before you realize the cost of the loan (closing costs) as savings. You mention you are going to sell the house as soon as you are out of Grad School. I assume that is roughly 3-years? It’s not worth the time, effort or money.

      Stay put.

    • #265858

      You are at the point in your mortgage when the monthly payment is mostly principle. Struggle a bit longer and that mortgage will be paid in full.

    • #266452

      Well Suze Orman would have a fit if she heard you were planning to use your property equity on a car! It really doesn’t make financial sense to give good money towards bad. That car isn’t even worth what you paid for it. One of the reasons we’re in this financial mess as a country is because some of us – maybe a lot of us used the equity in our homes to buy other stuff! And now we’ve lost value and that equity is no longer there. So you might consider refiancing the car loan against something else, or at least postponing until our economic situation improves.

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