Yep. I'm bugging out of here tomorrow at 5:00-ish - heading south for a long weekend with the fam.... CAN'T WAIT!
Just wanted to let those of you know who have held my hand (figuratively speaking) through the agony of refinancing hell, I decided not to go through with it.
Turns out, with the adjustment, the new payment amount versus the one I would get if I refinance, are only $7.00/month different. Yes, that's right: $7.00 a month. On top of that, the total mortgage amount would be $2,000 or so higher because of the refinance costs that would be rolled in.
So here's the real deal: not only would I not get a significant break on my monthly payment by refinancing, but I also would end up owing more over the life of the loan with a higher rate adjustment cap than I currently have, AND I would have to pay longer.
They wanted to do this as a 40-year overall mortgage, with 5 years until the next adjustment and a 3-year prepayment penalty period. I have just completed the 2-year prepayment penalty period on the loans I took out to buy this place in the first place. My adjusted interest rate for the first 6-month adjustment period is actually less than the new rate would be if I refinanced.
Granted, there are some unknowns. I do not know, for example, how much the rate will increase in February of 2008. I also do not know how much property values are going to fluctuate over the next several months to a year or two, if the overall payment gets to be too much.
But, I know that with the current loan documents, I am at least safer for the next six months than I would have been had I refinanced. The rate adjustment cap in the new package is 2.00% greater than the rate adjustment cap in the existing package, which I wouldn't have known had I not seen the loan documents - which they refused to send me until the day before the scheduled closing!!
I don't know what to tell people who don't already have mortgages, but with so many lenders selling their real estate mortgage portfolios to secondary market investment buyers, I can only say, read everything twice, ask questions, and don't sign anything until you do!! You can always say "no." If you're buying instead of refinancing, it might cost you some money in the short run, but it's better to lose a little up front than to lose a lot over the long haul.
Have a very safe and happy Independence day!! :)