Let me start by saying that this stuff is all Greek to me, as is basically anything involving math... But I keep hearing about "refinancing", so wondering if I can benefit.
Here's my situation:
- First mortgage (on home of 11 years): $108K balance and 5.625% interest rate on a conventional 30-year loan (11 years in, 19 years remaining).
- Second mortgage (took out to build pool 7 years ago): $29K balance and 8.24% interest on a 25-year loan.
Talking to loan officer, he initially said that something called a "Hart Program" would probably be the best way to go. But after he looked into things, he said that a "cash out refi" regular refi was better. Here are those terms:
- 15 year loan where I use my current equity to pay off the second mortgage. Term is obviously shorter (15 years versus the 19 that I currently have left) and monthly payment will be about $80 less per month. Overall savings will be $55K+ due to paying it off sooner.
**- However, what I don't understand is that I think he said that my new mortgage balance will be the total of my two current loans ($108K + $29K = $137K plus some fees of approx. $4K for a total of $141K). But if I am using my equity to pay off the smaller, second loan (29K), why would that be added in?
Didn't think of that question until after I had called time out and ended the call so that I could think about it all.
Thanks.
Here's my situation:
- First mortgage (on home of 11 years): $108K balance and 5.625% interest rate on a conventional 30-year loan (11 years in, 19 years remaining).
- Second mortgage (took out to build pool 7 years ago): $29K balance and 8.24% interest on a 25-year loan.
Talking to loan officer, he initially said that something called a "Hart Program" would probably be the best way to go. But after he looked into things, he said that a "cash out refi" regular refi was better. Here are those terms:
- 15 year loan where I use my current equity to pay off the second mortgage. Term is obviously shorter (15 years versus the 19 that I currently have left) and monthly payment will be about $80 less per month. Overall savings will be $55K+ due to paying it off sooner.
**- However, what I don't understand is that I think he said that my new mortgage balance will be the total of my two current loans ($108K + $29K = $137K plus some fees of approx. $4K for a total of $141K). But if I am using my equity to pay off the smaller, second loan (29K), why would that be added in?
Didn't think of that question until after I had called time out and ended the call so that I could think about it all.
Thanks.