New mortgage from scratch or refinance? Advantage?

Follow

Marcbibaud

• January 24, 2024 00:32

Hi! This sounds unclear so let me explain. My wife and I built a second home with cash, a HELOC and a short term loan from a family member. We just got to the point where we could get a mortgage to pay off my HELOC and family member, but timing was horrible, a 30 year fixed at 8.75%. But this was important as we were still in the finish stages and I figured the first mortgage is key and refinancing would be easy in the future. Well the future is here and two months later we're refinancing at 6.6%, closing costs are $2100 but I'm saving $700/month on the interest rate change alone and I've only made one payment so far.

So my question is this: if rates change in the next six months or so I'll look to refinance again, but is there an advantage to a first mortgage over a refinance? My family member is offering another short term loan to pay this mortgage off so we could start fresh, or from scratch so to speak. Does this make sense? The rate from family is lower so that's not an issue. Would there be an advantage to a refinance vs. taking a mortgage on a property that currently doesn't have one? Or am I overthinking? I thank you for any advise you have.

0

• 

  Susanne Zoller

  • June 24, 2024 00:58

  Great post! I’ve explored many options online, and professionals on T3l3gr@m have truly helped improve my portfolio, enabling me to stop working as a single mom. It’s crucial to use experienced professionals; their fees save you from potential losses. My initial solo attempts led to significant losses.

  0

  Comment actions Permalink
• 

  Christian Horvath

  • July 01, 2024 21:31

  Hey Marcbibaud,

  Here are some advantages and disadvantages to consider:

  Refinancing Advantages:

  Lower Rate: You've reduced your interest rate significantly from 8.75% to 6.6%, saving $700/month.
  Stability: Fixed-rate mortgages offer predictable payments over time, protecting you from potential future rate increases.
  Equity Access: Allows you to adjust mortgage terms and potentially access equity.
  Short-Term Loan Consideration:

  Lower Cost: If your family member offers a lower interest rate than your current mortgage, it could save you money in the short term.
  Flexibility: Short-term loans may offer more flexibility in terms of repayment and requirements.
  Factors to Decide:

  Future Rates: Monitor interest rate trends to determine if waiting for a lower rate with another short-term loan makes financial sense.
  Overall Strategy: Consider your long-term financial goals and ability to manage multiple debts. 

  I am a loan officer so let me know if you would like to discuss further!

  0

  Comment actions Permalink

Please sign in to leave a comment.