Refiance Rate Opinions archived

People are very mixed on their opinions of what is going to happen next... rates went up this week, after going down for 11 straight weeks. We are also trying to make this decision to lock a rate... sorry not much help!

It's always a gamble, since you just never know. I'd say if you are happy with what you are achieving through that lower rate, then you did a good job. We locked in at 4.625 two weeks ago and seemed to have hit the bottom for now. Even if it ends up going lower, we are still saving over $500 a month, so I won't complain.

You need to determine if you're willing to take the risk of rates rising... Every 1/8th point is only going to save you about $7.50 per 100,000 borrowed. So if your mortgage is 400,000, a quarter point is only saving you about $60/month. Is the risk of rates going up worth it?

MOrtgage rates are like stock investments - trying to time the bottom is usually not worth it.

We are presently locked at 5.125 coming down from 5.899. Our savings is around $240. a month so it's not bad but I can't but wonder if it's going to go down again or if this is the best rate.

I spoke with Bank of America today and they had a rate of 4.75% on a 30-yr fixed refinance. Unfortunately, it also involved 1.375 points, which was almost $4k for me. I've already locked in with Wachovia for 4.625 and .375 pts, but was looking to see if being a BofA customer would get me something more preferential. Clearly not. So look for a good rate, but look harder to less points, because that's obviously how they are making their money. Oh, and their application fee was $699! Wachovia's was $115. Maybe they're trying to cover some of Merrill's losses with points and app fees.

We are in the midst of a jumbo refi w BofA . 5%, no points, waived the app fee ($850). I told them I really am in no mood for any BS/ hidden fees and know how to write letters and will not hesitate to do so. They have been great so far but I wasn't born yesterday. I clearly get the impression they want to play ball and there is some wiggle room. If you don't like what you hear ask to speak w the next level up.

i'm locked in at 4.875 with no points and very low closing costs. whisper me if you want the brokers name and number. he's in millburn.

We're refinancing, too. We used one of the local brokers, and we also checked with Chase. As it turns out, Chase gave us the better deal. Our original mortgage is from 2003, at 5.545%, and the new one will be at about 4.875%.

If you refinance, doesn't it stretch your loan back out to 30 years? If I've been in my house for 5 years, then I'm down to 25 years left. If I refinance, I might save myself $XX a month, but aren't I taking on 5 more years of payments?

How do you measure this when evaluating if you should refinance?

trip, that is my scenario. been here 5 years, now going back to a 30 year...but there is a way to still only have 25 years left on your mortgage...by paying bi-weekly instead of once a month or by paying one extra payment each year will cut 5 years off.

That is a good point. Not only are you stretching your loan, but interest is front loaded. I'm not sure what the rule of thumb is on how to figure out if its worth it. I'd run the numbers though. Have you considered loans w/ a shorter term?

Posted By: Oldstonetrip, that is my scenario. been here 5 years, now going back to a 30 year...but there is a way to still only have 25 years left on your mortgage...by paying bi-weekly instead of once a month or by paying one extra payment each year will cut 5 years off.

That's sort of what we did when we refinanced a few years ago. We had about 17 years left but didn't want the payments of a 15 year so went with a 20 year and I try to take one month's payment divide into 12 and add that to principle each month.

Tom, who did you use at Chase? Our current loan is with Chase and my broker told me I should wait a bit. I think we are at 5.625. She said for it to make sense for us (with closing costs) we should wait until we can go down a point.

Posted By: Trip2121How do you measure this when evaluating if you should refinance?

Trip,

The most important thing when refinancing is to understand why you're doing it. Are you doing it to save money on the total loan? Are you doing it to increase your monthly cash flow?

For example, if you go with a shorter term loan, you'll probably pay more per month but you'll pay it off sooner. So your total interest payments are lower. If you go with a longer term loan, you're paying less on a monthly basis but will likely pay more over the life of the loan. The decision when refinancing is no different than when purchasing your home - find the best kind of loan for your situation.

If you can find a better place to put the money you'll save on a longer term loan, then it could be well worth it to stretch it out and pay less per month. Just be sure to take taxes into account on both sides of the equation - the fact that mortgage interest is deductible, and that most investments are taxable.

shh, as request:

Angelo Tomasone
Chase Home Finance
614-213-8365
angelo.m.tomasone@chase.com

rastro's advice is spot-on.

My Lovely WifeTM and I decided it's time to refinance. And we disagreed on how to use the advantage. She wanted to lower the monthly payment, and I wanted to reduce the overall cost (by getting a 25-year or shorter loan). Her Beloved FatherTM sided with her, not merely because he's her father. And we can really do both, if we're disciplined.

We're about five and a half years into our 30-year mortgage. We're getting another 30-year mortgage. As they say, adding an extra payment each year saves a ton of money, especially at the beginning. So we can still do that if we want, thereby achieving both goals of lowering monthly costs and reducing the entire cost. Not only that, and this is a big point, it's our choice. So if we feel we can't afford the extra cash, we can stick with the terms of the loan.

So for us, getting a new 30-year mortgage at a lower rate makes sense.