Mortgage / refinancing question

[mikebw]

Thanks, I'll check it out.

The big loan (5.875%) is an ARM. We have until 2012 before the rate adjustment on that.

I would like to lower the total interest payments over time, if that involves consolidation or anything else I am open to it.

[$tevie]

Bank of America has a very good section on their web site about refinancing. You can play around with various options and get some idea of what the rates and payments might be. BofA holds my mortgage and I have in fact refinanced with them as well and found them to be very helpful on the phone -- the rep and I walked through various scenarios until we found the one I was happy with. And as an existing customer you will have virtually no paperwork to fill out. I would start by playing online and if you want to pursue with BofA go ahead and do the prequalify app, you can simply say no if you don't like the terms they offer you when they call to follow up.
http://www.bankofamerica.com/loansandhom...alculators&context=financenter&calcid=home11

[davester]

I would definitely try to get that ARM refied to a fixed if you can get the same or a lower rate (unless you are planning on moving before 2012). The way the economy is going, I'd say the risk of future runaway interest rates is high.

[mikebw]

I am unsure of how long we will stay at this property. Probably not 5 more years. Does that mean we should not try to refinance? I would think we could stand to save whatever the refinancing costs are over the next few years, with a good new rate.

[davester]

Since you are doing a refi, you can't deduct your refi costs. It makes zero sense to do anything but a "no cost" loan on a refi. The slightly higher interest rate is designed to exactly balance the loan cost.

[mikebw]

Not sure I understand what you mean.

Are you suggesting that the only option I have is to refinance both my loans into one, but at a higher rate? I thought the point of refinancing was to settle in at a lower rate. Why would anyone do it otherwise? Is that what you mean?

[davester]

No, I was only referring to the fact that when you refi, you should never pay points or other loan fees (although sometimes you can't get out of paying a small application and/or appraisal fee). It's better to get a refi with a higher rate but no fees/points, unlike when you first took out the loan and could deduct the points in that year.