Refinance or no?

[shepav]

My husband and I have an ARM on our mortgage. We have been trying to sell our house for a while now, with no luck. His company is transferring us, and is paying for our rent on our new place, and will pay for utilities on our house now (we need to keep them on for showings, etc). We've not refinanced, as we're trying to sell. Unfortunately, in the meantime, our mortgage continues to rise - another $80 in January. I'm tempted to refinance NOW, just so that we can save on the ridiculous increase in our mortgage. Of course, this may not be worth it....

What do you guys think? To refinance, or just stick it out until it sells?

In the meantime, we're losing my income, making money tighter and tighter...

Any help would be appreciated.

[vishenda]

One of the problems you are going to run into is most mortgage lenders require that you home is not listed for sale. If you find one that does not care they are going to want a prepayment penalty so when you do sell it the get some money out of it. I would tell you to try and stick it out or try and rent the property to take some of the financial burden off of you guys.

[safari]

Do not refinance. It doesn't make any sense to pay fees if you're going to sell the house soon. You said you have an ARM mortgage, which should already have a lower rate than other types of mortgages. What were you thinking to refinance to?

[shepav]

Thanks for the response - I had a sneaking suspicion that this would be the response. Our ARM expired in May of 2005, so it's been going up every six months since.

I'm just frustrated that our house hasn't sold yet. We're not even going to be living in the home, and we're paying the mortgage on an empty.
We've gone back and forth on renting. We're hesitant to do this, as we're going to have people coming in and out of our home. I'm scared of getting a bad tenant or having to kick someone out if it sells.

I just wish it would sell, that would solve all of our problems. It's the meantime that's a bummer.

[ren]

Okay, you say you've had it on the market for a while, how long is a while and how much have you lowered the price? What are other homes in the neighborhood selling for? Because if you're getting eaten alive by a mortgage, it might be the wisest course of action to cut the price and get it off your back, even if it means giving up some of your downpayment.

[shepav]

We've had it on since March, and we have dropped $10000 already. Anymore than than we will start losing money. Grrr... We have dropped it, so hopefully it does sell.

[creditcardfree]

I agree with the others...do not refinance. Be grateful that your rent is being paid by the employers...not all have that luxury.

Your goal is to get that house sold. Have you had a lot of showings? Is it listed just beneath a breakpoint? (ex. $99,900 $119,900) Is it possible to get any furniture in there for staging? Can you offer any incentives? I'd be asking my realtor what else can be done? Open houses, additional signs, showings for other realtors are just a few ideas.

[JanH]

My mother uses a rental agent (?) for her rental house. I think they take 10% or something. After taxes, insurance, and repair bills for normal wear and tear, she doesn't make much, but she is not ready to sell that property yet (her mother's). Meanwhile, I guess it is paying for itself until she is ready. I think with the agent, she doesn't have to do the renting or deal with any problems with the renters as much. You might go this route if your house doesn't sell yet and you don't want to keep putting money in. Maybe, maybe you could make enough to pay the mortgage bills? I don't know much about it. Good luck!

[Harrison]

March - November..... 9 months.

9 X $80 = $720, quite a lot for me.

I think you must do some homeworks to research your area or the marketing plan you used to sell your house. If you really don't have any idea or confidence to sell the house on time, I think you should go refinancing or discuss with your bankers and get a good deal.

Just a piece of my mind.

[Ima saver]

I would not advise renting. I had renters in a house I was trying to sell. they would never let the real estate agents show the house. I am sorry for your problem, this is a tough time to sell a house.

[Saving in So Cal]

Any chance of renegotiating your husband's relocation package. In the 1990s, when we were in the midst of another buyer's market, the relocation companies would buy an employee's house at fair market value if it didn't sell within 90 days or so. Without the worry of trying to sell a house, the employee had a more successful relocation.

[Elgin526]

Originally Posted by shepav

We've had it on since March, and we have dropped $10000 already. Anymore than than we will start losing money. Grrr... We have dropped it, so hopefully it does sell.

Ah, but a house isn't worth what you need to sell it for to make money, it's worth what a buyer is willing to pay for it. If it's been on the market for a while and hasn't had any offers, it's almost ALWAYS because it is over priced. Have your agent do a new cost comparison to similar homes in your area and see what they are selling for. That will tell you what you need to market your house at. You may just need to take a loss and move on, unfortunatly. Remember, every month you make a mortgage payment, you're losing money, you need to stop the bleeding.

[ren]

I think Elgin may have a point. How much longer will your husband's company pay rent? It might be worth taking the pain now just to avoid having to pay rent AND the mortgage, insurance and property taxes on your old house. That's a quick path to financial ruin right there.

[Harrison]

I just found a rule from CNNMoney.com that

"It's worth refinancing your mortgage when you can cut your interest rate by at least one point."

You can checkout the site http://money.cnn.com/popups/2006/mon...5_rules/2.html

[ren]

Yeah, but that's only if you're planning on holding on to the house for a few more years. They're trying to get rid of it. The refi might save them a couple hundred a month and cost them $1500 in fees up front.