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Making Homes Affordable Refinance??

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  • #1

    Making Homes Affordable Refinance??

    I'm looking to refinance my 80/20, but i'm about 90% certain that I don't have any equity in my house. I'll called my lender (Bank of America) and they said I qualify under the Making Homes Affordable Program to refinance my primary mortgage from 6.875 to 5.25% interest. (5.25% with 3/4 point for 5.47%apr) This would save almost $200/month, but would not do anything with my second mortgage. I don't have to get an appraisal and it seems like most of it can be done over the phone.. Are there any negatives or negative implications towards doing this?

    Any other input? He also quoted me for an FHA loan and combining both mortgages and it came out to nearly the identical price per month. Also, can I only do this program (MHA) through my current lender? My credit was above 800, if that makes a difference....

    Thanks in advance!
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  • #2
    Besides the savings per month, you need to take into account any fees (that .75 point and any other) you must pay. Have you figured the actual number? Will you be in the house long enough to recoup the fees through the saving on your monthly mortgage payment?
    "There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid

    "It is easier to build strong children than to repair broken men." --Frederick Douglass

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    • #3
      yeah, it's gonna save me $157/month after everything is said and done, including the point and refinance fees.. I'm not too excited about rolling the closing costs ~$3000 into the loan, but I'll break even in 1.7 years and we plan on staying in the house for a lot longer than that... I'm gonna hopefully pay the 2nd mortgage off early. Without having any equity, I guess this is my only choice (that I know of)...

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      • #4
        This will also push out your payoff date, correct? Sounds like a lot of fees and inconvenience for not much savings.

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        • #5
          Are your current loans fixed or adjustable? How long do you plan to stay in the home?

          Here's a good calculator for helping evaluate whether or not it makes sense to refinance:

          Loan Comparison - Refinancing

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