Refinancing

[bornalonghorn84]

With rates at 4.125 (according to UTPhil2006 and Prodigy Mortgage), my question is, is there a chance they fall lower? Basically, at what point does it become gambling with a low rate, and just pull the trigger? 4.25? 4.00? 3.75? This has been weighing on me. Let me know if others are in similar situations, I'd love to hear your thoughts.

 

[zork]

The goal is to jump from a 30 to a 20 or a 15 year term too. Not just rate.

The reason is you pay mostly interest on a 30 year loan in the first 4-5 years. So if they stick you for another 30 year loan then you are paying mostly interest again for the next 4-5 years when you will probably move.(a big percentage of people move within 8-10 years)

Also consider when you might be moving again too.

In our case we will likely be moving to a better school district in the next 2 years.

If you can afford the higher payment of the 15 year note with the rates of today the payback is much, much shorter.

That's just my opinion.

 

[chango]

What is your rate/term now; along with time frame for keeping this house, like zork said? Rates are at all time lows, so if it saves you money pull the trigger and don't worry if rates drop another 1/8 or 1/4 after you lock i People make a **** ton of money in the stock market while others do nothing and wait for the perfect price to buy or sell.

My two cents.

 

[hornpharmd]

The general rule that I always heard was you should not refinance unless you can drop 1 to 2%. If you are early on in your mortgage then you can probably stay with the same # of years. But if you are farther in then you could look at going to a 15 or 20 year as mentioned.

I refinanced 2 years into my original mortgage and got 1% lower. Sure I wish I had waited but I coudln't predict the rates would go this low. They were actually saying at the time that the rates would be going up. But in the end I broke even on the refi in 20 months and now am saving money on what I would have paid otherise. I continue to make the same payment as I did before and plan to stay in my residence for many years.

You should probably be considering staying in your residence for at least 4-5 years in most cases if you are going to refinance. This way you can be assured your bet will have paid off.

With rates as low as they are today I would say that if you are considering refinancing and just wiating for rates to go lower, then you should just go ahead and do it.

 

[orangecat]

I agree a key is term, but also principal.

If you're like me, with a fairly low principal, what really matters more is closing costs.