Should I refinance?

D

DollarOutta15cents_IHB

New member
My mother has a home with the following loans:



1st

? 15 year conventional

? $74,632.80

? 5.375% fixed

? 9 years 11 months left on loan



2nd

? Home Equity Line of Credit

? $40,760.87

? 2.75% variable



She doesn't want to extend her loan out much further (in about 10 years she will be retiring). With today's rates, does it make sense to refinance these loans? If someone can break down the math, or point me in the right direction, it would be much appreciated. If you need further information, let me know.
 
Does she want the loan paid off by the time she retires?





FYI, my mother is in the same boat, wanting to retire in about 10 years. This was last year so she wanted to retire in 11 years from then.



She had:



6.125% 30 year fixed. about 97k balance. and about 23 years left on the life on the loan.



We refinanced to in April 08:



5% 15 year fixed, wrapped all costs in Loan (and got a little money back) for a balance of 100k

then from the start ontop of the monthly payment she is paying 200 and something a month extra so that the loan is completely paid off within 11 years (now 10 years) so she will retire debt free.



My advice would be pay off that HELOC ASAP as possible since the rate could change (do you know the terms on that variable rate?) and she is only 10 years from paying off the first, could she pay any additional principal a month towards that? even 100 a month could shave off a good amount of time



what is her payment on those loans?
 
Playing around with some numbers. Tell me if I'm wrong.....



Took out a loan in April 2004 for 100k? payments are 810.47



For me I dont see a point in starting a new loan and consolidating these two especially if she wants to retire in ten years. That correlates perfectly with when 1st matures so why not let her retire mortgage free? Can she handle both payments comfortably and afford to put extra towards paying down the second?
 
she should just pump all the cash she can into paying off the HELOC asap, since we all know that base rates, whichever it is pegged to, are due to rise.
 
[quote author="freedomCM" date=1242366304]she should just pump all the cash she can into paying off the HELOC asap, since we all know that base rates, whichever it is pegged to, are due to rise.</blockquote>


Totally agree here. Make the fixed payments on the 1st and pay off the HELOC as fast as possible.



The fixed rate you have is not terrible, and probably not worth a less than 1% refi.
 
If this was my mom I'd say no. Since it's not my mom, I'd still say no.



You can ask the bank to mod her line (no cost, no credit hit) to a fixed if you're worried. The rate will be in the 6's most likely.





My .02c



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