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des1rees · Joined: 03 Dec 2007 Posts: 3 2.68 Dollars($)

We had refinanced to a 30 yr fixed in June of 2007 at 6.50%. The lender contacted me today and said it would be a great time to refinance since rates are now at 5.625, and the good faith estimate is showing a monthly payment which is exactly $100 less than what it is now. The closing costs are $1885. Should I do it now or wait to see if the rates come down more?

livinginnky · Posted: Mon Dec 03, 2007 12:35 pm Post subject:

If that is true it is a no brainer... Do it!

It would take exactly 19 months to break even and after that you save the $100 per month. So for the remaining 341 months you would save $34,100. Rates don't get much better than that. Is this the same lender that just refinanced you?

Are you planning on moving or selling anytime soon?

Is it for an adjustable rate instead of a fixed?

des1rees · Joined: 03 Dec 2007 Posts: 3 2.68 Dollars($)

Thank you so much for the prompt response. It is with the same lender, it is fixed ( dont want to think of adjustable with the currnet climate) and we do not plan to move for a while.

D.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi des1rees,

Welcome to this Forum.

I think Eric has given you the right suggestion. You can go for the refinance if it is right information. Most important thing is you save a handsome amount of money every month.

Thanks,
Larry

evolovik26 · Posted: Mon Dec 03, 2007 9:09 pm Post subject:

Just make sure there is no hidden costs the $1800 might just be the lender fees but there might be other fees involved. Other then that it is a good deal.

livinginnky · Posted: Tue Dec 04, 2007 9:02 am Post subject:

I was thinking that too Eugene. But you know sometimes they will use their loss retention to ensure that they don't lose a customer. They don't always require new title work etc. So hopefully everything is legit. If so I still think it sounds like a great deal.

des1rees,

If anything changes or you have any additional questions, let us know.

Guest

Seems like a no brainer.. but what if with Interest Cuts here in December and lets say again early next year, the RATE is around 4% or so..

than u'd maybe be saving $150 or $175 a month..

I just don't see the Fed raising rates any time soon..

livinginnky · Posted: Wed Dec 05, 2007 1:17 pm Post subject:

Elliot,

What makes you think rates will go to 4%? Also the fed doesn't control mortgage interest rates.

rick · Posted: Thu Dec 06, 2007 8:07 pm Post subject:

There is another consideration you might want to ask about. Ask the lender to give you choices of other interest rates. For example, is the lender quoting you the wholesale rate? Or is it a retail rate? Or, maybe it would make sense to buy the rate down. I supply my clients with a spreadsheet that lists about 6 or 7 interest rates, with the corresponding prices. That way, the client can make an informed choice of whatever makes the most economic sense.

No matter what, it would be great to lock in 5.625%. Congrats!

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

It sounds like a good deal if you plan on owning the home for more than a couple of years.

gmakerley · Posted: Fri Jan 11, 2008 11:11 am Post subject:

thank you eric for pointing out the lack of control the fed has on mortgage rates. what a fallacy that is!

my only concern is that you should have put that statement in bold, italics, all caps and underlined!

yourbestmtg · Posted: Fri Jan 11, 2008 2:54 pm Post subject:

Sounds like a deal! You really haven't paid anything towards principal yet on your current loan & like Eric says - 19 months to recoup your costs is great (if you can recoup your closing costs in 24 months or less it's a benefit). How about the appraisal? Are they waving this? Also - there is no application fee - right? I say go for it - if you get down to closing & the numbers have changed - don't sign & if you do - you always have 3 days to cancel provided this is your primary residence. Make sure you get a copy of the closing package when you sign & keep your "Right to Cancel" page handy if you choose to exercise that option.

You have nothing to lose except time provided there is no cost out of pocket! Have a great weekend. Laughing

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Have you decided to refinance? I wouldn't bank on rates coming down much lower than they are right now. Actually on just this past Friday, mortgage rates actually hedged up a bit.

Guest

The closing costs sound too good to be true. Are you sure this isn't a bank? Banks do not have to disclose their back-end fees. So they can easily tell you that the front end cost is minimal but get their REAL money on the back.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

I do agree that the closing costs do seem low but if they are truely that amount then I say go for it. Make sure you get a rate lock in writing so that they cant come back later and add points saying that they have to buy down your rate or anything else to that effect.

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