Hey have any of you thought of or have refinanced? I ask b/c I'm trying to be 'safe' and save some money.

My bank says I could refinance both home/truck under a "Cash Out Refinance" and save about $300 a month @ 5%. However, should I sell, trade-in, or wreck said vehicle, the balance due is still tied to this new 1st mortgage. So, having an extra $300 per month sounds nice, but the potential for loss is not.

I could refinance my home at a lower rate and save $100 a month. This sounds safer.

Also, my father said to check into a non-escrow refinance. Have any of you heard of this? This type of loan I'd pay the home owners insurance and taxes out of my pocket rather than escrow. I had no idea that I was paying interest on my loan's escrow account! This applies to most mortgages! My father said when he refinanced at a lower rate non-escrow account he saved about $3,000 a year (after he paid the insurance/taxes).

I plan to stay in my home for about 5 years. I want to eventually sale it and find land or an existing home on land for my horse, pets, and myself.

I wonder if rates will continue to drop a bit?

Also, I'm so worried about the economy.

I would NOT refinance your vehicle payment into your home loan. Instead of having it paid off in 2-4 years (or whatever your term) you would be paying on it for 15-30 years, long after the value of the vehicle has been reached.

You say you could refi the mortgage and save $100 per month, and you'll be there for about 5 years. That's a savings of $6,000 - and a bigger savings if you are there longer. But you need to look at how much it will cost to refinance the loan, if you are extending it a long time, etc. If you originally had a 30 year loan and have been paying on it for 5 years, now you only have 25 years left. If you refi, you'll be back to 30 years! Is that worth a savings of just $100 per month? This will depend on the reality of you selling in 5 years or so.

Regarding having an escrow account for your taxes and insurance, you must be careful. I've never heard of paying interest on that money, so confirm with your lender for your particular situation. What you have to be careful about is that you are used to paying those expenses monthly with your mortgage payment. If you do it yourself, you will have to pay large chunks of money a couple of times a year.

Your insurance company can probably set you up on a monthly or quarterly billing plan, but those sometimes have a small billing charge each month. In California, our property taxes are paid twice a year, so I have a large chunk of money to pay out in the spring and fall. If you aren't saving and prepared for that, it can be difficult to pay. I just divide what I'm going to owe by 12, then save that much each month so that I can be sure I'll have enough when the bill arrives.

Hope this helps!! I'm not a mortgage broker, but I've handled all our finances forever and have done lots of research on this type of thing for our refis and such.

K

Never, ever, ever, finance a vehicle into a home mortgage. As DD said, you are paying each month for 30 years on that vehicle. Instead, I would find somewhere I spent an extra 100 a month, or even fifty, (like a cell phone, cable) and cut that out, then pocket the 100 a month and pay it on my home mortgage. EXTRA. You wouldn't believe the interest you are knocking off the loan...then when you go to sell, you recoup that and then some.

People say all the time that they are at bare minimum with their expenses, but when asked if they ever eat out, or get a coffee at Starbucks, or their nails done, or rent movies....they cough.

While I don't advocate putting your money in the mattress, I do strongly suggest saving, saving, saving. I believe it will get worse before it gets better.

See, thats the issue. I don't have any extra money to save. Don't have cable, line dry my clothes, no more mobile phone bill, take/make lunches, very rarely eat out, check out books/movies from library (rather than renting), combine errands, have car pooled (and may do so again if possible), heat set at 65, A/c at 78, change to CFL bulbs as necessary, etc. If it came to it, I could cancel the phone, security, and internet, all of which would save $105 a month -- yet I'd have no communication and not feel safe. NO, I won't give up the horse or any of my pets! NEVER! NEVER EVER!

All utilities, grocers, and now gas again, are rising. No pay raise and no bonus. The economy will get worse before it gets better and I may not have a job after June (do not take this to the bank, it could be a possibility).

I do have one (1) year of pay (after taxes) in the bank.

Should the economy improve, I do plan to sell my home in about 5 years (and hope that it will sale). If I can find a loan at about 4.50, I may refinance (currently it is 6%). I understand I will pay longer, but if saving $100 to $150 a month (including the refinance fee) would help me to pay off the vehicle earlier (possibily).

Gosh, maybe I'll continue to concentrate on paying off the vehicle. For instance, with half of my tax return I can pay an additional $1K principal payment and continue paying an extra $15 per mth towards the principal payment.

Gosh, thanks gals. I cannot tell you how much I appreciate your comments.