I am totally ignorant to the whole process. With the rates the way they are I am just diving in to see if it is worth it to me. Anyone have any experience?

Thanks,
Paul

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Just a tad

What is your current rate and goals over the next five years? The decision should be well thought so be sure it make sense for you. #1 being how long do you plan on owning your current home because the cost may offset any savings you may get or think you're getting.

Don't get the Fed Rate confused with long term rates, yes rates are good but they jumped due to the Fed Rate cut today will be a big day since the Job's Report is released @ 8:30 am today....in any event they should trickle back down in the next week or two.

MY G/F just refi'd her condo. Her 5 yr. adjustable from a local bank was coming due in March. She probably locked in about 3 weeks ago. She "settled" yesterday. Her new rate is 5.75% 30 yr fixed. Had to have taxes escrowed however. GMAC was the lender. The local bank was not interested in re-newing her loan!

I still owe about $66k on my home. I have a 30 year fixed rate of 6.125%.

I plan on being here about another 5 years max. I understand you have to plan on being in your home long enough to make it worth it. Closing costs apply.

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If you're already well into your current term, it may be better to stick with that since you are most likely paying more principal now. If you refi, you go back to paying almost all interest.

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D, you mean "almost all interest"? Paying "almost all principal" implies a low (or lower) rate, yes?

Another cup of Joe for you!

You're right. Maybe I need another POT of Joe. I stand corrected.

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OBK #55

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Max 1984 300TD 285,000 miles - Sold
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Orgasmatron - 2006 CLS500 90,000 miles
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I'm doing a re-fi settlement next Tuesday.
I was able to lock in a rate of 4.75 on a 10 year note. I did this around noon on the 22nd, and by the next day rates were back up to 5.25.

The closing costs incurred are minimal compared to how much I will be saving every month. I also went from 12 remaining years on a 15 year note to only 10 years. Needless to say, I'm tickled with the deal.

I re-fied about 5 years ago. Best thing I did. I have a 15yr fixed at 4.5%. In 10 years I'll be paid off. For me it was a no brainer. I do my financing through my credit union with AA. The only cost was 1% of the new loan amount. Did not need a new appraisal or any of the other stuff normally associated with a home loan. The market sucks so we will be here for a while. Besides, this 1,500 Sq Ft house is plenty big for the 2 of us and all the pets. Why get into debt to keep up with the Jones?

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I've only been in my house since late '02/early '03.

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I have done re-fi's several times with different homes and came out ahead each time...including ultimate home sale.

As far as the statement of "paying" all interest", that referrred to starting all over again where the largest portion of your mortagage goes to paying interest. Obviously, as the note matures, more of your payment goes towards the principal.

The issue here is that you have less total interest to deduct each year when you file taxes. This is what spurs a lot of folks to either refi the existing balance, or look for a larger home later on.

Banks are the least amicable when it comes to securing a mortgage...moreso nowadays with the meltdown.

Easiest way is through a mortgage broker. They can usually get the whole process started and completed within a month, without any out-of pocket. And closing costs are factored in, so you don't have to come up with that either. The loan gets sold to a mortgage company or bank almost immediately after you sign the paperwork.

Like others said, how long you plan on staying in your residence determines the feasibility of a refi...the mortgage broker will ask you that as well, to see if it's worth it to you (and them).

And for GOD"S SAKE, don't do an ARM!!!

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Keep the current loan. You can't save any money when closing costs are factored in. The 6.125% rate is still quite good.

@ 66K you won't save much even if you drop the rate a full percent and zero closing costs, if you must do something look at a 10 or 15 - 20 year mortgage, which may or may not make sense.

If you were at $250K its a different story.

5.125, 30 year fixed.........is possible with no points..........???

Looking to refi but am going to wait until rates drop, and I believe that they will, to under 5% on a 30yr. fixed. The present refi closing costs for me will be around $2500. At 5.25% I can save around 185 to 190 per month over present monthly, I am presently in the 3rd. year of a 5 year adjustable at 5.5%. Thus ROI on closing costs will be 25 months. However, there are 2 ways to look at that-when you refi, you in effect, skip one mortgage payment, if you took that payment with you at closing, you reduce the amount you refi, but again, the flip side of that is still present. Just depends on your way of looking at things. If you are staying 1 month beyond the ROI of your closing costs, you are saving money. As far as my take on lower rates in or around March/April, that is just my belief and my financial advisor's. Good luck with your decision.