Home Refinancing Options
26th February 2006
I’m facing a bit of a home refinancing dillemma. Back in the (stupid about money) day, I took an interest-only loan on my house. I also have a 2nd mortgage, but at least that’s at a fixed rate that I’m paying down automatically every month. The interest-only loan is killing me. Every month, the rate goes up - it’s tied to the LIBOR rate - and so does my payment. So should I refinance?
Here are some of my options:
- Keep the interest-only loan.
- Make payments as usual or
- Pay additional principle like mad.
- Refinance to a 30 or 15 year fixed.
- Refinance to something else.
- Sell my house.
I really want to refinance my home to a fixed-rate mortgage, because I hear it’s the best thing to do, and I believe that. The problem is that my payment will jump over 500 bucks by switching to a 30-year fixed-rate mortgage.
If I pay down my interest only loan, I might be doing the same thing. It’s an option.
Selling my house is not an option at this point. I made the horrible mistake of refinancing credit card debt into my second mortgage. Now I owe 100% of what my house is worth. In order to sell, I’d have to pay a realtor and other seller’s costs, and at this point that’s prohibitive.
I’ll let you know more about my situation as it develops…
-or-
October 5th, 2007 at 7:59 am
[…] Isn’t the 21st century great? This isn’t a plan for how to own a home, it’s a recipe for how to stay in debt forever. I just read that foreclosures are up as well as bankruptcy filings. It’s part of why I’m worried about the economy, but I can’t do much about anyone but me. I read that mortgage rates may have dipped a bit recently, so I’m going to try to get out of the interest only mortgage I’m in and get into something fixed and no longer than 30 years. Someday, I’ll actually own the place I call home. […]