Home Payments Refinancing?

[bhenderson-boston]

I am curious if there would be a way we could reduce our home payments without paying too much cash out of pocket.

We have a young daughter in daycare, and another on the way, which we will probably put in the same daycare… $300 a week for each!

We have a 5/1 ARM mortgage payment each month of $1,918.10. The interest rate is 5.25% and the balance on this is $285,615.95.

My wife and I currently have a home equity loan with balance of $48,636.87
At the time, the best interest rate I could get on the loan was 6.75%.
We pay $491 each month on this (P 216.33, I 274.80)

The only other major loan outstanding is a car payment of $4,718.82.

We have about $20,000 in the bank and I’m exploring options to reduce our total monthly payments. We make a good amount of money combined… but living in Boston is expensive, so we’re still feeling like when the new baby arrives we wont be able to save anything, or as much as we’d like.

Do you have any ideas?

Thanks
Brian

[debtfreecb]

It doesn't sound like you have a lot of wiggle room. I have situation that is similar to yours. It wasn't able to make much progress paying off debt until my car was paid off. I don't have any magic tips on your mortgage situation but my guess is that the FED is going to cut interest rates again and maybe you can get a better fixed rate/refi on your 5/1 arm and your home equity. Good luck.

Stay in touch - there are plenty of us out here rooting each other on

[jIM_Ohio]

I am curious if there would be a way we could reduce our home payments without paying too much cash out of pocket.

We have a young daughter in daycare, and another on the way, which we will probably put in the same daycare… $300 a week for each!

We have a 5/1 ARM mortgage payment each month of $1,918.10. The interest rate is 5.25% and the balance on this is $285,615.95.

My wife and I currently have a home equity loan with balance of $48,636.87
At the time, the best interest rate I could get on the loan was 6.75%.
We pay $491 each month on this (P 216.33, I 274.80)

The only other major loan outstanding is a car payment of $4,718.82.

We have about $20,000 in the bank and I’m exploring options to reduce our total monthly payments. We make a good amount of money combined… but living in Boston is expensive, so we’re still feeling like when the new baby arrives we wont be able to save anything, or as much as we’d like.

Do you have any ideas?

Thanks
Brian

you owe $333k on the house, what is it worth?

I ask because if it's worth more than $417k, you own 20% and could combine the loans. I'm thinking you could get a 5.75% rate with fixed rate on 30 yr loan with good credit.

[TurningColorz]

Like Jim_Ohio says, combine the mortgage and home equity loans by refinancing with a fixed 30. You should be able to roll most of the refi charges in there as well. It might also be worthwhile to either pay off the car before the refi, or structure a slight "cash-out" into the refi to pay off the car in full.
Then you'd be left with only 1 fixed rate mortgage payment.

How sweet would that be?

Mike - TurningColorz