So here is my situation:
Bought my condo in 2003 for $245K. Refinanced in 2005 to a 20 year fixed at 5.25% (my current mortgage). Current mortgage balance is about $180K. Condo is worth about $160K today.
I had run my address through Fannie's online tool before and it always said they didn't back my mortgage. I finally got around to calling Bank of America to double check and it turns out - Fannie does own it. No wonder Fannie imploded on itself, they don't even know what they own but that's another story I guess.
1. I started the paperwork on a HARP Refinance. Apparently (at least according to BofA) the high LTV ratio doesn't qualify me for 15 yr fixed (which is what I would have preferred) but I can get a 30 yr fixed at 4.25%. This would lower my monthly payment by ~ $600 / month, but obviously this stretches out the loan term; and since I'd be paying principal down at a slower pace this would leave me underwater for awhile.
2. I can do nothing and keep my current mortgage. Assuming the market doesn't drop further, I would at least be caught up to the value in 2 yrs. My current payment is very manageable against my monthly take home.
I would be living in this condo for the foreseeable future, but once I FIRE I would probably relocate and sell it. But that would be about 15 or so yrs away, unless the DOW helps me out and soars to 12,000,000 this year.
I've run some numbers through excel and it basically looks like the refinance gives me the flexibility of a lower payment, but I pay down the principal much slower...meaning I'm probably underwater for awhile (unless I paid $ on top of the normal payment). Staying in my current mortgage I'll at least get to even with the market in a couple of years. So I'm kind of on the fence about whether to move forward with the refinance or not.
Thoughts or advice, please? Thanks in advance.