We all know you can refinance to get lower payment with lower interest rate..........not for everyone, but another option.
Factors for a normal refi are:
1. How much are you putting down?
2. Will your home appraise for a refi since homes are now at a lower value?
3. How much will your closing cost be? $2,000 - $4,000
4. With tight lending requirements, can you actually get aproved for a refi loan?
Here is another option for a lower payment.......... if you have available cash and the above items 2, 3 or 4 cause a problem.
Call your current mortgage lender. Ask them about a principle recast or re-amortization.
They charge about $250-$350 to do this. They take the money you send them and apply it to the current principle. They use the same interest rate your loan is at and re-amortize the new principle amount (with taxes and insurance) with the remaining years.
For example: Your loan payoff is $150,000 at 6% and you have 28 years left. But you have $50,000 that you may want to put down toward the mortgage. You pay the $250-$350 for the recast (re-amortization), then your new payment will be calculated at $100,000 at 6% for 28 years.
Of course a normal refi would be better if you could get a lower rate, your able to get approved for the refi and don't mind paying the $2,000 plus closing costs.
Brad and Angela Lawrence
Greensboro Real Estate
