Should i refinance my house in this situation?

Kimi
We bought the house a year ago and the APR is currently 6.75 (30 year, fixed). We owe around $172000 (not counting the home equity line, 21K). I was just looking at Quicken loans and saw tone of ways to save money using their calculator. Stuff like "Smart Choice 5-year" and ARMs. Should I bite?

Augustina
Stay away from the arm! That is why we are having this bog forclosure crises. The arm sounds great but this is no gurantee that you will for sure be out of your home.My husbadn and I got lucky for the first time in our lives and we purchased a home on a 30 year mortgage at 5%. MOST of the people in out neighborhood did 1 year and five year arms because they were in the 3-4% range at the time and now they are regretting it big time. I live in Raleigh NC and we supposedly have the best real estate market at the moment, yet this houses have been sitting on the market for 1 year plus. There are tons of houses in my neighborhood for sale b/c the rate went sky high on them and they cant afford. Three homes have been forclosed.In the end it is your descion, but I would steer clear.Good Luck Robert!

Ghislaine
Think twice before you refinance it. The 5 year ARM rate is about 5.5 to 5.8% and fixed rate is about 6.5% (assume you have excellent credit). 5 yrs later, the 5-ARM loan will turn to adjustable and rate will go up. You said you plan to sell it in 5 yrs but what if the house value drop to below your loan amount. I'm saying you may have to sell at $150k or even $100k 5 yrs later. Then you'll have to make the difference cos' you owe the bank total of $193k. Are you willing to pay $43k or $93k to sell your house? You may save some money in the first 5 yrs with 5-ARM but after that... You should do the calculation yourself.BTW, don't think about short sale or foreclosure is an option. It's not an option to homeowner and you never want to go through one in your life.

Corrie
I have to answer this question every day for my customers. Arms are not bad as long as it is appropriate for the situation. They are often not explained correctly. Just please know who you are loaning from. If you know for sure that you will be selling your house in 5 or less years, than a arm will work for you. I have a 5 year arm right now for 5.49% and a month ago I had a 10 year arm for 5.49%. Rates are now going up so if you are going to do it, do it now. P.S. you shouldn't be paying that much in closing costs. Our closing fee was $150.

Raisa
Do not get into an ARM. I understand that you don't want to be in the home in 5 years, but what if you can't sell it & your ARM adjusts ? You may be in the same situation as thousands of homeowners not being able to refinance because the value of the home has dropped! Do you have any equity in your home? Probably after 1 year, no! Is your APR 6.75% or your interest rate 6.75%? There is a difference, it is not the same.If you don't have to refi, don't! Stay where you are at.

Frankie
First I just had the worst experience ever with quicken loans. They kept upping the amount of money I had to bring to closing. One week before when it was too late to get another lender my closing costs went up 5000. Second 6.75 is a good interest rate now. Third you will probably have to pay so much for new fees and closing costs that it will not be worth it to refinance right now, because you have only been in the house 1 year. Lastly house values are dropping and if you already owe 193, 000 you are probably upside down if you had to sell...

Breanne
It all depends on ratios, appraisals, and income. You should look into it, there's a chance of it being possible. But I'd leave the ARMs alone. And I'd shop around. Not lenders are the same.Check out Loan-Com. info and do a search for refinance loans. They have dozens of loan programs available at reasonable rates and affordable terms.

Bertha
You didn't say what your home is worth. If you know, Know, KNOW that you will not be in the home for more than 5 years, then go for the 7-yr ARM. Lots of people took 3 & 5 year arms a few years ago and are reGRETTing it.

Corazon
Based on your scenario..Defenitely not! In your case two factors play a critical role in your decision making...Rate of return on the cost of refinancing and risk factor.1. Sell the sizzle not the steak is what a lot of sales agent try to do and in mortgages the rate is the sizzle and the monthly payment is the steak. You should focus on how much it is going to cost you to refinance your mortgage then you should compare how much you will be saving monthly. If you get a descent return on your investment (which is the cost of refinance then go ahead and do it IF and only IF you are willing to take the on the risk factor.) Just to give you an idea..if you currently have a 6.75% int rate and are being offered a 5.5 5yr ARM ( not a bad rate in the current market it will prob be higher than that) then the difference in monthly payments would be $111.19. That is a total of $1, 134.28, $6, 671.40 in 5yrs. I dont know much about your particular scenario to calculate total closing costs but they should roughly be around $5, 500 in order to get a rate like 5.5. If that is the case you have refinance to save approximatley $1, 100 if you sell in 5 yrs. It would make more sense to refinance if the 5.5 were a fix 30yr program and you were going to stay for much longer. You would also have to consider the amount of int you would be saving during the 5yrs on the $111.19 a month but it is not going to be significant during the first 5yrs.2. Consider the risk factor...There is NEVER a guarantee that market conditions in any are of real estate will stay stable or net a profit. It is all specualtion and one can only guess. Besides that who knows what your financial condition will be in 5yrs. There is obviously a level of risk and you would have to consider if it makes sense to risk it all to save $1, 100 in 5yrs. If you get in to this 5yr arm and decide not to sell or cant sell you could potentially loose your home or loose a lot i mean a lot more money than $1, 100.Hope this helps...good luck!