TangoJuliet
Diamond Member
Ok, my wife and I purchased a home in 2006 during the peak of the housing market boom. We had enough money to buy something huge but instead bought something very modest (for living in NY).
We recently had a son so the house is getting smaller and smaller by the minute. I also would like to move somewhere closer to work as the commute is 65 miles each way and can vary from 1 hour to 3 hours EACH way.
We had planned to buy a bigger house next year - something in the $439-479,000 range and between $8-11,000 in taxes.
Anyways, the problem is we are currently upside down on our current loan. We have an outstanding balance of around $230,000 and the house is worth between $190-195,000. I just spoke with our loan guy and he said there is a federal refinance program for people like us and he emailed me back a spreadsheet with all the numbers.
I really don't understand some of the numbers but I think I got the gist of it. There are 3 different rate, payment and closing cost options.
I'm guessing the one with the smallest closing cost ($3000) would be best for us. Its a 5.25% loan (current loan is 6.75%) and has .50 Pts. It would reduce our mortgage from $1600/m to $1370 saving us $230/m. It would take roughly 16 months to recoup our closing costs by paying less on the regular mortgage.
Now, that would mean that we would have to keep the house for another 16 months before we could sell it (if prices stay the same) or we could rent it out. After all the taxes and common charges it would cost us about $1950/m on the new loan and I'm guessing we could get someone in here for about $1500-1600/m meaning we would take a hit of about $350-450/m but someone would be paying our mortgage. However, that would take a bite into our next home's mortgage.
I was planning for a mortgage (taxes included) of about $3000/m and a total monthly bills, etc of about $4900. Now we would have to add another $350-450 to that total so that would look like $5200 to $5300/m for a new house. That still leaves us with a little wiggle room to put some money into our savings.
Cliffs
Upside down on home (about $30-40,000)
New Federal Program to refinance at lower rate
Want to buy new home next year
Re-fi would make us have to keep home for another 16 months to break even (closing costs)
Please if you don't have anything useful to comment - then don't comment at all. No "McMansions" "You Fail" etc. I am looking for intelligent answers as to what to do. Yes I know living in NY sucks (home costs) and Yes I'd prefer to live in FL or NC but that is not happening right now. Thanks in advance AT!
We recently had a son so the house is getting smaller and smaller by the minute. I also would like to move somewhere closer to work as the commute is 65 miles each way and can vary from 1 hour to 3 hours EACH way.
We had planned to buy a bigger house next year - something in the $439-479,000 range and between $8-11,000 in taxes.
Anyways, the problem is we are currently upside down on our current loan. We have an outstanding balance of around $230,000 and the house is worth between $190-195,000. I just spoke with our loan guy and he said there is a federal refinance program for people like us and he emailed me back a spreadsheet with all the numbers.
I really don't understand some of the numbers but I think I got the gist of it. There are 3 different rate, payment and closing cost options.
I'm guessing the one with the smallest closing cost ($3000) would be best for us. Its a 5.25% loan (current loan is 6.75%) and has .50 Pts. It would reduce our mortgage from $1600/m to $1370 saving us $230/m. It would take roughly 16 months to recoup our closing costs by paying less on the regular mortgage.
Now, that would mean that we would have to keep the house for another 16 months before we could sell it (if prices stay the same) or we could rent it out. After all the taxes and common charges it would cost us about $1950/m on the new loan and I'm guessing we could get someone in here for about $1500-1600/m meaning we would take a hit of about $350-450/m but someone would be paying our mortgage. However, that would take a bite into our next home's mortgage.
I was planning for a mortgage (taxes included) of about $3000/m and a total monthly bills, etc of about $4900. Now we would have to add another $350-450 to that total so that would look like $5200 to $5300/m for a new house. That still leaves us with a little wiggle room to put some money into our savings.
Cliffs
Upside down on home (about $30-40,000)
New Federal Program to refinance at lower rate
Want to buy new home next year
Re-fi would make us have to keep home for another 16 months to break even (closing costs)
Please if you don't have anything useful to comment - then don't comment at all. No "McMansions" "You Fail" etc. I am looking for intelligent answers as to what to do. Yes I know living in NY sucks (home costs) and Yes I'd prefer to live in FL or NC but that is not happening right now. Thanks in advance AT!
