Hey guys/gals. I have a situation here.

Last night as I was watching the news and listening to the fiscal reports for the end of year '07, it seems everybody is talking about the Fed dropping rates again, perhaps once or twice in the next 6 months.

I spent a greuling 12 months trying to get re-fi'd out of my original mortgage on my new house and last month finally moved into a normal 30-year fixed whereas I had a sh1tty ARM with a rediculous interest rate.

I took the ARM because of the equity I had in the home right off the bat. My plan worked and ended up having about 30% more value in a year then the purchase price, so I made out.

Here is my delima. I have a roughly $6900 payoff on my current H3 lease. That is what shows up on my credit report. If I buy a new H3 and magically manage to negotiate the lease payoff so it wouldn't be too bad, I will have a 30k+ car loan on my credit instead of a $7k loan, therefore surely ruining my chances of doing another re-fi because my DTI will probably be too high.

Comparing my current rate of 6.375% to a possible 5.75% or lower on a 30 year fixed loan, if I refi and keep my current truck, doing the math I calculate I'll only save maybe $100 to $150 a month on my mortgage payments by holding out a few more months to do another re-fi, which I may be able to do at no cost.

Would you sacrifice a new vehicle when yours gives you issues and keep yours, purchasing an extended warranty therefore allowing you to re-fi again to save that $150 or so everymonth on your mortgage, or would you keep your current mortgage rate and trade your current truck in, knowing damn well it will probably just cause more problems and issues, for a new one and just accept your current mortgage and try to pre-pay a little extra each month to compensate?

This is a serious question. I'm not sure what to do and in the long runnot quitesureif the $150 dollars I may save every month is worth the aggrivation of keeping a vehicle that I may have to keep brining back to the dealer.

And since I know ImportKiller won't even get past the first paragraph, I can call him a loser and he will never know

 

Yeah, but what are the closing and up front lender costs of a refi?? Typically it does not make sense tor refiw/in 180days/short term????

The fed would be nuts not to drop the rate again at this month's meeting, probably will have to do it again in March, should have started the cuts months earlier last year. [:@] So they might have to drop them even a third time because they sat on their azz too long. So your refi would probably be June/July at the earliest to make sure your got the best timing for a rate drop. Then you could look at ??? trade/sell, new lease/buy???? Just food for thought brud, you asked.

 

Hate to answer a ? with a ? but it sort of depends on your situation. You can write off the $150.00 per month( or least 95% ) of it as an interest deduction on your taxes so the $150 is really the 150-your marginal tax rate. Do you need the deduction? You may not. Remember also that an older vehicle is likely ( maybe not in your case ) to require more maintenance. Based on all of your posts on your vehicle I might be more inclined to get away from that truck into a new one. JMO

 

and another thought... what is advertised is not what you get.... the fees is where they make the money... I got mine at a 6.5% and the actual note is 6.65%...

I assume you are shopping companies and this is a huge difference...

Get the house... if you have substantial equity you can always take a loan against it.

Avoid the refi's.... it's not good to keep doing it... if you can't get 1% lower then it is not worth it... unless you are in a debt consolidation scenerio...

DON'T do the Bi-monthly scam... if you have money to pay them... then pay the current deal... it's only an extra payment over 12 months.

 

Hummerguy, IMO you have just accomplished the most important part of a good financial plan and that was getting your house mortgaged at a really decent rate over a term/life that makes the payments comfortable for you and your lifestyle. Muddy is right, it usually isn't financially sound to refinance with less than a 1% difference in the rate and besides if you look at the last 50 years of mortgage rates your 6.375 rate is very good. I wouldn't hold my breath for a 5.75% 30 year mortgage rate because in the last 40 years there are only a hand full of months with that rate.

Another thought is that a home loan and the rate you can actually get depends on your credit score in an absolute sense while a car loan rate is less sensitive to credit score. A car loan can be shopped much easier and you can negotiate more. Someone will make you a car loan at a rate you are comfortable with but it make take some effort on your part.

Leave the house as is!!! Now decide if you want that new Alpha or whatever and go get it.

 

You guys have some good points. I thought about what I have now compared to what I may get, and it probably wouldn't make sense after more closing costs and so forth. Thanks for the advice. After reading everything you guys have said, it seems like it would make more sense to keep the loan I have and get the truck. I'm really tired of bringing it in for repairs all the time. Let's see what happens next Saturday.