Refinancing Mortgage and/or Auto Loan
I wanted to ask, with the low rates we are currently seeing, if it makes sense to refinance my house and/or my car? Would it be financially devastating to my credit if I do both (even if the long term affects are positive)? I have an excellent credit rating (790 or 801 depending on the source), and I am employed full time with a job I’ve had for over 10 years.
For my car it is a 2017 Honda CR-V and I plan on keeping it until my repairs cost more than the car is worth, and I’m paying 5.2% APR currently.
For my house I have a loan that started in 2018 and I’m at 5.375% on a 30 year loan term for a new build. The only thing with the house is I’m not sure how long I’m going to stay in this house, meaning I might sell sometime in the future. I’m guessing I am at least a year a way from even thinking about selling as I’m dating someone seriously and a move might take place – depending on how the economy/housing market goes after COVID -19 and when we get married. If the economy doesn’t improve and the housing market tanks, I might be in this house for another 3 to 5 years…or if there is a window in which I can sell at a good price it might be sooner.
I know the goal is to pay both off as soon as possible. Since the mortgage is the obvious higher of the two loans I’m mentioning, I want to make sure that is a good investment if my length of stay is unsure. Is there a magic number, such as 6 months of a lower APR, to make it worth my while? I have a house in the suburbs so my hope is these kind of houses will be in demand with work from home, etc. when it is time for me to sell. If not, I’ll simply stay longer until I can sell for a good price.
Thanks so much!
Jennifer
Terry Says
Start your mortgage refi now! Immediately. With good credit, you can probably save a few hundred dollars every month. You might as well take a 30 year loan since you won’t be there forever to live in a fully paid home. That will be your lowest monthly payment.
Then use that extra monthly money to pay off your car loan asap! It is insane to keep paying on a car loan!
Start at RocketMortgage.com (Quicken) or GuaranteedRate.com.