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 Post subject: Mortgage Decision Tools on the Web
PostPosted: Wed Aug 29, 2012 11:14 am 

Joined: Fri Jul 27, 2012 8:28 am
Posts: 88
I was recently trying to decide whether or not it was financially advisable to refinance my 2 year old mortgage. I found a great site full of mortgage related calculators and advice that I wanted to share with the community.

http://www.decisionaide.com/MPCalculators/menus/MP_Calculators.asp

I am still trying to make up my mind because refinancing will drive up my PMI costs enough that I won't really be saving money until about 3 years from now - and of course the interest is tax-deductable but PMI is not. However, it is unlikely that we will sell our house, so we will most likely save a great deal of money by the end of the mortgage by refinancing at current rates.

But the site has great info for comparing loans, refinancing offers, payoff things (including tax implications) and even prepayment plans that fully display the amortization tables.

Enjoy!


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 Post subject: Re: Mortgage Decision Tools on the Web
PostPosted: Wed Aug 29, 2012 2:05 pm 

Joined: Fri May 04, 2012 2:23 pm
Posts: 818
Life really is much simpler without PMI. I'm about to close on a refi for a home purchased 10 months ago. I'm rolling in my escrow funds and I received "negative points" from the lender for my closing costs. When all is said and done, I will get about $4k cash out of the deal and my payment will decrease by ~$100/month. Not a lot of numbers to crunch there....

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 Post subject: Re: Mortgage Decision Tools on the Web
PostPosted: Wed Aug 29, 2012 2:29 pm 

Joined: Fri Jul 27, 2012 8:28 am
Posts: 88
I agree on the PMI thing. For better or worse, we decided that the value of living in walking distance from 2 generations of family was worth the high cost of housing in the area. Tanks to the housing crash, we were able to pick up a small, efficient, well maintained 1949 cottage. However, even at half the price the previous owners paid, we still didn't have enough downpayment. Given that housing prices have actually climbed in my neighborhood, and our overall living expenses actually dropped from buying the house, I think we made the better choice - I guess time will tell.

Right now, we have PMI on the scales that were set pre-crash so I pay about $100 per month. Refi would put us on post-crash scales and drive it to $160 per month, but I drop our payment by $200 per month (about $180 comes from the reduced interest, $20 from adding the two years we've been paying back in.)

BUT since I have an FHA mortgage, it also restarts the PMI clock, meaning I can't drop PMI for another 5 years. Right now, I'm two years in and should I aquire the funds to pay off about $30k of my mortgage, I can drop PMI in 3 years. When you add in the tax equation of the interest being a deduction, it basically breaks even.


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 Post subject: Re: Mortgage Decision Tools on the Web
PostPosted: Thu Sep 06, 2012 5:00 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5399
I would not refinance. I would do whatever I could to get rid of the PMI first. I have not done the math but my gut says the math works out for this and it also puts you in a much better position. PMI is like shackles.


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