soonermomma Posted September 5, 2011 Share Posted September 5, 2011 We have four children and currently live in a three bedroom house. We have lived here for 8 years. At some point we plan on trying to sell this house and buy a four bedroom house. We want to start putting back some money for when this time comes. Would it be more wise to put the extra money towards our current house loan or to put the money in our savings account for when we buy the new house? Also, we would be eligible to refinance our house next October to lower the interest rate, but is this is a smart choice if we are looking at selling it withing a 2-4 years after that? Our current interest is 6.5 and we could reduce it to around 4.5 by refinancing. Any thoughts or advise are appreciated. Quote Link to comment Share on other sites More sharing options...
BakersDozen Posted September 5, 2011 Share Posted September 5, 2011 Our plan is to not put extra toward our mortgage until we have a substantial savings in the bank; once we have a year's pay in the bank we will work toward paying off our mortgage faster. We refinanced a year or so ago but that was to cover our grossly increased insurance premiums. :glare: Quote Link to comment Share on other sites More sharing options...
HoneyFernDotOrg Posted September 5, 2011 Share Posted September 5, 2011 Save your money and refinance. If you can get the financing costs rolled into your loan, you won't actually end up paying for it when you sell your house, but that is a significant interest rate reduction. We refinance every time we can lower it by one percentage point. Treat your house payment like rent, and save the extra or pay off credit so you can move debt-free. Quote Link to comment Share on other sites More sharing options...
chepyl Posted September 5, 2011 Share Posted September 5, 2011 Hey! I live in Moore, too!! I have never seen anyone on these boards who lives so close to me! I would save to have your emergency fund (6 months pay in the bank), and refinance. Once you have the emergency fund, I would start saving for a bigger down payment on your next house. If you plan to sell in the next few years, I would not worry about extra payments on the loan, unless you think the house will sell for less than what you owe, then I might try to pay it down and hold off moving for a little longer. Quote Link to comment Share on other sites More sharing options...
LibraryLover Posted September 5, 2011 Share Posted September 5, 2011 If you plan to move soon, I would save the money. Quote Link to comment Share on other sites More sharing options...
SweetPea Posted September 5, 2011 Share Posted September 5, 2011 We just refinanced at 3.85 for a 15yr mortgage. The fees were low and with a rebate it didn't cost us anything out-of-pocket. Our monthly payment is now $150 lower a month and we are paying it off in 20 rather than 28! So, we'll have quite a bit more equity when we sell in 10 years (or that's the current plan). Quote Link to comment Share on other sites More sharing options...
DawnM Posted September 5, 2011 Share Posted September 5, 2011 Could you refi to a 15 year loan? Our refi rate is 3.37% with no closing costs (other than paying into our escrow account). We could have gotten a 3.25% rate but it would have cost us a couple of thousand in closing and the difference is so minimal in terms of interest paid. Dawn Quote Link to comment Share on other sites More sharing options...
Ottakee Posted September 5, 2011 Share Posted September 5, 2011 Check with local credit unions. Ours is offering a great rate right now with no refinancing charges. That would certainly make it worth it. Make sure you have a good emergency fund and once you have that, you can pay down the mortgage faster. Quote Link to comment Share on other sites More sharing options...
soonermomma Posted September 5, 2011 Author Share Posted September 5, 2011 Hey! I live in Moore, too!! I have never seen anyone on these boards who lives so close to me! I have never seen anyone so close either! Are you part of a local co-op? Quote Link to comment Share on other sites More sharing options...
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