Questions about refinancing a mortgage I'll never pay off

Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes

7mo

1. Realistically, you are not going to lower your payment anytime soon. You cannot get anywhere close to a 3.375% interest rate today.

If you refinanced exactly what you owe today and your payment would go UP ~$100 per month and that isn't counting the fees associated with refinancing.

2. Be glad you locked in that ONCE IN A LIFETIME low rate when you did! Just plan your retirement around that payment.

3. If you get into retirement and need to tap some equity in your home you could consider a 2nd mortgage but I would try to avoid that.

4. Work to have someone that matters to you enough to make them an heir!

5. If not think of a charity you might want to leave something to.

6. If you don't create a will and if you have no close relatives whatever you have goes to the state through a process called "escheat".

2 Reply

Janice Carter

Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 605 votes

7mo

David, you already have a very low interest rate, so a traditional refinance won't reduce your payment in today’s rate environment. Realistically, the most effective ways to lower your monthly obligation would be to focus on reducing your escrow costs. Shop your insurance aggressively, verify your property tax assessment and be sure you are taking advantage of any homestead or senior exemptions available in your area.

You could also explore a reverse mortgage, if you qualify, as this is often the only option that can significantly reduce or even eliminate monthly payments with the loan repaid when you pass. Given your goals, it would be wise to speak with a lender who specializes in reverse mortgages and manufactured housing to see how that option compares to your current loan.

1 Reply

David Harrison
OP
Buford, GA · Member since 2017 · 11 posts · 2 votes
7mo
Quote from @Janice Carter:

David, you already have a very low interest rate, so a traditional refinance won't reduce your payment in today’s rate environment. Realistically, the most effective ways to lower your monthly obligation would be to focus on reducing your escrow costs. Shop your insurance aggressively, verify your property tax assessment and be sure you are taking advantage of any homestead or senior exemptions available in your area.

You could also explore a reverse mortgage, if you qualify, as this is often the only option that can significantly reduce or even eliminate monthly payments with the loan repaid when you pass. Given your goals, it would be wise to speak with a lender who specializes in reverse mortgages and manufactured housing to see how that option compares to your current loan.

Homestead or senior exemptions... I don't know anything about such things but will look into it.
0 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

7mo

As Kevin said, refinancing may not lower your mortgage payments. If it won't keep your current mortgage and if you need money down the road, then either do a home equity loan or a reverse mortgage. I also agree with Kevin about looking into a charity to leave your estate to.

0 Reply

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

7mo

As other posts state, you have a far below interest rate. This will make it challenging to reduce your payment.

However, you have 5.5 years of equity pay down and appreciation.

So you have 24.5 years left. If you did a non cash out refinance back to 30 years it likely would not be enough to lower your payment.

However, if you really do not have anyone to leave the house with and want all your money to be spent by you, depending on your age you may be able to look into something like an inverse mortgage. If the property is worth $112k, you have ~$27k equity. If it has appreciated, you could have more equity. The reverse mortgage would whittle down your equity each month and may be able to lower your payment (likely not a whole lot, but sometimes every little bit helps). It does not hurt to look into it to see if it is worth doing

Good luck

0 Reply

Ken M.

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

7mo

Quote from @David Harrison:

Hi,

I have a double wide home mobile and will never pay off the mortgage. I'd like to retire in a few years and would like to get the monthly payments down as low as possible. Since I'll never pay the place off getting the monthly payments lowered is the most important thing imo at this time. Can I refinance and make it work that way? Is there a way to make this situation to the lender's advantage? There is no one to leave this home and the remainder of the mortgage to so is there a way to let the lender have the place when I die leaving whatever equity I have in it to them? Or something like that?

Back when we were discussing everything before making final agreements I asked one of the loan people about doing something to reduce monthly payments when I was about to retire and was lead to believe it could work out that way because I would have some equity in it and the value of the property would increase over a few years time. The property value should also have increased because the garage had a shingle roof that was in poor condition and leaked at the time of purchase but since then I've had a metal roof put on it that looks the same as the metal roof on the home and it doesn't leak any more. Also I put up a porch with a covered roof at the side door instead of just a little step platform with nothing over it, if that might help a bit.

Here is some information from the Loan Application we signed at the closing:

30 year conventional loan bought 06/18/2020 Loan Amount $95,200 Sale Price $ 112,000 Interest Rate 3.375%

Homeowner's Insurance $31.73 per month for 3 mo. $95

Mortgage Insurance $21.42 per month for 2 mo. $43

Property Taxes $139.08 per month for 5 mo. $695

Here is some information from the monthly Loan Statement:

Explanation of Amount Due

Principal 183.82 Interest 237.06 Tax and Insurance 209.34 Regular Monthly Payment $630.22

Account Information

Interest Rate 3.375% Principal Balance 84,288.81 T&I Balance 1,177.87 Maturity Date 08/01/50

Thank you for any help figuring out how to get lower monthly payments!!

David

Maine, USA

Consider taking in a roommate (renter) until you sort it out.

3 Reply

Patricia Steiner

Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes

7mo

Not judging, just saying: looks like you have set yourself up very well already. I don't think that can be beat. Congrats on creating such a great financial position early on...you got this.

0 Reply

Bo SmithPro Member

Hinton, WV · Member since 2026 · 1k+ posts · 373 votes

7mo

David, worth calling your lender about a loan modification or payment deferral for retirement. Some will restructure payments if you have equity. Also reverse mortgage at 62 if that timeline works. Have you asked your current lender what options they actually offer?

0 Reply

David Harrison
OP
Buford, GA · Member since 2017 · 11 posts · 2 votes
7mo
Quote from @Bo Smith:

David, worth calling your lender about a loan modification or payment deferral for retirement. Some will restructure payments if you have equity. Also reverse mortgage at 62 if that timeline works. Have you asked your current lender what options they actually offer?

I have not talked to them yet. Wanted to see what some other people thought in advance. I will be 67 in March. You said something about 62 but I don't have any idea what the significance of that age is.
0 Reply

Questions about refinancing a mortgage I'll never pay off

Questions about refinancing a mortgage I'll never pay off

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