Hey You Clever-About-Money People—Refinance?
I am wondering about the possibility/practicality of refinancing my house. Our interest rate is already pretty low—I think 5.375%. I’m wondering if the cost of refinancing it would be worth it. Would it end up saving us money each month? Anybody know what kind of rates are possible right now? Is there some kind of magical formula along the lines of "if you can go down X percentage points, it’s worth it. If not, then no."
Looking for creative ways to weather the storm.
March 19, 2009 at 1:06 pm
I’m not clever with money. I’m clever with people. And I have a great person who would know for you. Her name is Julie and she just rocked F&J’s world.
March 19, 2009 at 3:00 pm
You’re pretty darned low already. Is that a fixed 30 year?
Also, one way to lower your payments is to reset the clock. But since you’re really planning to stay in the house in the long run, if you restart 30 years from here, where will that put you? Are you okay with paying off your mortgage when you’re 66 instead of sooner? How many years have you been on your present mortgage?
March 19, 2009 at 3:13 pm
And yeah, the real thing to do here is to talk to a good mortgage broker who will run you through all the permutations and issues before you pay one penny. If Julie can’t do that for you, my broker Sandy is totally completely awesome about that.
Sandy Bennett
(408) 998-4343 ext. 13
sbennett@prefmortgageloans.com
http://prefmortgageloans.com/
March 19, 2009 at 3:21 pm
I second the recommendation for Sandy. She was awesome for us.
March 19, 2009 at 4:45 pm
I agree with Ammy on this. If you are already in a 30 year fixed at 5.375, you are in a really good loan. If you don’t have some crazy balloon payment or the like coming up, then refinancing to a lower interest rate will probably end up costing you ~$6,000. I’m guessing that rate based on what my refi is going to cost. I’m in a 5/1 ARM that rerates in August, so I have a more pressing need to move, but if you are 30 fixed, that rate is great. Also, the loan requirements have gone WAY up evidently. I got a far more thorough checkover than any other borrowing experience. It was even to the point that I had to dump the first lender (or maybe two) because their documentation requests were so unreasonable.
However, that being said, if you want an expert opinion I would recommend Neal Smith from teamnks.com (I’m pretty sure he’s the owner). He has been strangely honest with me about refi rates and practices.
March 19, 2009 at 6:44 pm
I was considering refinancing too, but your rate is already pretty low I don’t think it would do you too much good to refinance. Mine’s at 6.5% and I’ve decided to hold off. Main reason is because I’m not sure how much longer I will be staying there. I may sell in the next year or two, if I can.
I agree with others you can contact a mortgage broker and they will let you know if it’s a good idea or not and what the break even point would be. I’ve found that you get the lowest refinance costs if you go through who you have your current loan with so be sure to check with them too. I talked to 3 different brokers and found that my current lender was the best option as far as the lowest cost which is what I am most concerned with.
March 19, 2009 at 7:07 pm
Hell, mine is at something along the lines of 5.6% (I’d have to look) and when I checked in with our broker he said it wouldn’t be worth the expense. In order to get a REALLY GOOD rate we’d need to buy a point so we’re just holding on to our 30 year fixed and trucking along too.