Refinancing help -?

Question

I bought my house 4 yrs ago with an FHA loan at 4.95% with a monthly pymt of $1250 for 30 yrs. I just took out a second mortgage last year for $30000 @ 6% for 10 yrs @ $335/month & still owe about $28K on the 2nd mortgage. My house is value only at $235000 and I need $161000 to pay off my mortgage. I'm thinking of refinancing but because my 1st mortgage rate is so low I don't know if refinancing the 2 & combine the payments @ 5.99% interest will make sense or not, the closing cost is about $800 with .625 point. I'm pretty sure in the long run I'd save $ on interest but since the monthly payment doesn't go down much if I refinanced right now would I save any $ in short term? In case I decide to sell my house 5 yrs from now. I have a new baby coming in a few months & trying to find the best way to save $ & cut out debt. I’m so confused with all the numbers. Appreciate any help I can get from someone who's more experienced & good with numbers.

Thanks

K

Answer 1

So how much do you owe in total on both mortgages?  Is the $161,000 you mention the total you owe on both mortgages or just the first mortgage?  I'm trying to figure out how much it is going to take to pay off both mortgages so I can calculate your new mortgage payment if you refinance.

But just looking at the interest rates, I don't know if it would make sense to refinance.  Your primary loan is currently at 4.95%, and you would be increasing that to 5.99%.

Are you trying to refinance so that you can take equity out of your house and possibly pay off other debt?

Answer 2

I recommend that you go to the following website.

Most homeowners don't realize how much they can save by consolidating debt into a new mortgage. However, they don't want to give out their contact info online and be spammed/called to death.

So, why not have a debt consolidation calculator that would analyze the homeowner's situation and give accurate answers. It would give personalized options, yet let them remain anonymous. An online tool that would give real numbers, not misleading or "teaser" rates. It would help some people learn they could save, and others that they're better off to do nothing. It would let people decide at their own pace, not sell their information off to have five lenders call. LionSaves is the first website of its kind.

Answer 3

It doesn't make sense to refinance.  You'll not make up the difference of .01% reduced rate on the 2nd mortgage to make it worth paying closing costs, point and higher 1st mortgage rate.

Unless you have other financial reasons to want to refinance, I suggest that you should save the trouble.

Best wishes.