we are trying to decide if it is worth refinancing since we are on a arm that has just applied as of Nov 2006 rate has gone up to 10.5 from 7.5%.
It cannot go any higher than 13.5 % . Right now we owe 120,000 but I think the home will maybe appraise at 135,000 . Which I am told brings us to a 89% LTV .. Is it advisable to just wait and pay the diffrence instaed of paying 5000.00closing costs and becoming upside down . I live in Simpsonville SC and this area from what I understand does not go up in property value very fast . Is there a website out there I can check on the percentage of growth in my area?
We do not have very good credit middle is 624 with a BK7 out 1 year.
If anyone can help please do we need the right advice can not afford to do anything wrong right now since we are trying to rebuild our credit which I know is a long road but we ran into a bad situation.
I guess the first question is how long do you plan to stay in this home? If the answer is more than say, 4 years, you should most definitely refinance. The other question is, can you afford the new payments? What if it goes to 13.5%? The last thing in the world you want is a late payment on your mortgage. Besides dragging your score down, this is the most important thing lenders look at. Would the pressure of higher payments make it more likely to cause a late payment? Also, there's no reason why you should have to pay $5K in closing costs on a $125K home. You're probably looking at closer to $3K.
It's all a question of what rate you can get now. From what you've stated, if you can go Full Doc, you'll probably be in the 9's. Could be lower but there's not enough information to go on...
Hope that gives a little insight...Good Luck!
BTW, if you want me to look further into your situation, shoot me an email with your # and we'll talk.