Question by User: What should I do when I refinance my house?
My credit has gone up so im going to refinance my house in about 2 or 3 months…I have about $ 15,000 in a money market account…My question is does it make sense to take that $ 15,000 and put it into my house when I refinance or is it not going to make a big difference in the payment? The house cost $ 720,000 I have two mortgages on the house that total $ 6,000 a month and I am looking to lower my payment..
Best answer:
Answer by mernieinc
make sure you have NOTHING in collections.. get a free credit report to make sure..
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If the 2nd mortgage interest rate is MORE than the interest you are making on the money market account, I would be paying off that mortgage first. Then with the “extra” money you have for lowering your house payment from the re-fi (assuming you have NO credit card debt) I would start having automatic withdrawals from your bank account put into a Roth IRA. If you DO have credit card debt, start paying that off beginning with the highest interest card. Good luck!
If your mortgage is $ 720K, making a $ 15K principle payment is still a relatively small dent in the total amount financed. The best way to reduce your payment would be to wrap your 1st and 2nd into one loan, with a lower overall rate. Visit http://www.WestCoastHomeMortgage.com and I will give you a free payment scenario. It’s easy, just fill out the online application and we will be able to present you with your loan options by Monday.
refinance mortgage to combine the 1st and 2nd mortgage into one lower rate mortgage paying off any additional higher interest debt you may have and as you have equity for.
you should have at least 3 months salary as a reserve – and the money market account should be left. Although the return on the MM account is likely less than the interest paid on your mortgage, if you apply the funds on your mortgage and then come upon bad times or an emergency, you may not be readily able to take the funds back out of your equity.