Question

Hello!  I am looking in to refinancing my home and was wondering if those of you who have gone through this process can share your knowledge.Hello! I am looking in to refinancing my home and was wondering if those of you who have gone through this process can share your knowledge. My house was built in 1904 and definitely needs some work. I've replaced the siding and added insulation, but we have a number of half finished projects going on. I bought the house about 5 years ago for $105, 000 with a USDA loan. My interest rate is 3. 875 and I owe $85, 000. I know that is a good rate, but I am interested in refinancing so that I have the option of renting my house, which you can't do with a USDA loan. I live in a good school district and could get about $1000 in rent and my PITIAS is only $650. Here are some of my questions but I'd also love to hear any additional tips or suggestions you may have. 1) Is it better to go to go through an individual mortgage broker or use one of those online sites like lending tree? 2) What are the fees associated with refinancing? 3) Will I need to finish up some of the projects we are working on to refinance? 4) Will I need a down payment with $20k of equity in the home? 5) Should I look in to a 15 year vs. a 30 year, or go with the 30 year and just double the payments when I can? I'm always afraid of something happening so try to keep monthly expenses as low as possible Thanks in advance!  

Answer 1

1) I used our credit union. I like using someone local 2) you will have some fees I think ours were close to 1k. 3) you may have to finish projects if they effect your appraisal 4) you do. It need a down payment for a refi. 5) 15 years will cause your payment to go up significantly so that will cut into monthly profit but it will be paid off much quicker. You have to determine your goals there.  

Answer 2

Don't switch to a 15 yr mortgage. Keep it at 30 and just make extra payments when you can. That's what we're doing and the house will be paid off in 6 years.