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Dh and I are thinking about refinancing our home loan. Do you think this is a good time? Our main mortgage rate isn't too much higher than the current one, but our second mortage (we did an 80/10/10) is at 8.5 %.
 

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My experience has been that the actual lending rates are still up. We got our mortgage four years ago at a fixed 6%. We are not able to find anything low enough to refinance. I've heard it should be a percentage point below your current rate to refinance.
 

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We are. We have a broker and he finds us the lowest rates every 6 months or so. We moved into this house in 9/2007 and this is the second refinance - I think we're around 2% lower then when we started. Since he's a broker we're not charged one cent for the service.
 

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AfricanQueen99, I really, really urge you to look closer at your paperwork. I know people often think they're refinancing "for nothing" but that's not the case. Various fees just get rolled into the new mortgage amount. And keep in mind that whenever you refinance, the 30-year clock starts over.

One of my closest friends used to say the exact same thing you're saying. Exact. Now she realizes they were being taken advantage of.
 

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Quote:

Originally Posted by SoHappy View Post
AfricanQueen99, I really, really urge you to look closer at your paperwork. I know people often think they're refinancing "for nothing" but that's not the case. Various fees just get rolled into the new mortgage amount. And keep in mind that whenever you refinance, the 30-year clock starts over.

One of my closest friends used to say the exact same thing you're saying. Exact. Now she realizes they were being taken advantage of.
I will add to really crunch the numbers. I have a pretty high interest rate. 7.25%. I put no money down, have marginal credit and my loan was small at 66k. I put my cash reserves in to remodeling. Approximately 15k in mostly DIY work. THe plan was to refi after about a year when the work was one and my LTV was better. Weeeeelllll.... I could do that. I would save about 3k in interest over the life of the loan. That's what it costs to refi! lol So, I'm just going to wait my two years, drop the PMI (@ $50 a month) and leave my loan just how it is. Once I finish school and pay off other debts, I'll up my mortgage payments and pay off early. The plan is to stay here forever. It's tiny but it's home and I won't get caught up in the next real estate boom and crash.
 

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Quote:

Originally Posted by SoHappy View Post
AfricanQueen99, I really, really urge you to look closer at your paperwork. I know people often think they're refinancing "for nothing" but that's not the case. Various fees just get rolled into the new mortgage amount. And keep in mind that whenever you refinance, the 30-year clock starts over.

One of my closest friends used to say the exact same thing you're saying. Exact. Now she realizes they were being taken advantage of.
I appreciate your comments. My husband is one of those eat/breathe/live finance guys so I know he goes everything with a fine tooth comb. We've discussed this point. Our broker essentially "loses" the commission he would make from us and only received one from the mortgage company. So he might lose 3K from us, but gets 10K from them.

And, like so many Americans, we're not planning on dying in this home so starting the clock over isn't a concern.
 

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I hear interest rates *may* drop to 4.5%, the lowest in around fifty years. That's just rumor, though. I got my apartment for 5.5% fixed rate, and the place was a relatively cheap deal for where I live. Do I want an even lower rate? Sure do! But I don't know if it's low enough to really go through with it. I'd have to sit down and figure what I was saving. I don't mind starting the clock over again since I've only lived here one year, and I intend to make more payments higher as my salary rises.

Assuming I have a job, in this economy.
 

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Here, the interest rates have dropped, on average, a quarter-point a week for the past 3 or 4 weeks. I've been reading that the feds have pumped enough liquidity in the markets to create more available credit, but few people are taking advantage of it.

We're getting ready to refinance, but we keep putting it off every time the rate drops again. (We've started the paperwork with the credit union but haven't actually signed yet.) Our current mortgage is 6% and our credit union's rate next week will be 5%. Also, our credit union is offering $500 off closing costs, and because their closing costs are already lower than a bank, most people end up with free closing costs.

I had also read that some financial analysts are predicting that the rates will drop as low as 4.5%, so we're watching.
 
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