Stupid crazy interest rates

[CHenry]

I am about to close on a refinance of my home. I had 5.38% and I locked in earlier this week at 2.60% for 15 years! Of course Iwill continue to make the larger payment and have it payed off early.
I'm no finacial advisor but I can say, if you plan to stay in your house more than 3 more years and you are paying more than 5% interest, or even 4%, I would look into refinancing. This will save thousands in interest.

 

[ripnbst]

It has been this low for a while. You've been screwing yourself for over a year. I've told everyone I know who bought homes in years past they should refi now.

 

[HackerF15E]

Don't forget there are substantial closing costs in refinancing. You HAVE to do the math, based on the equity in your house and the closing costs compared to what you will save, to see if it really saves you money.

 

[CHenry]

It has been this low for a while. You've been screwing yourself for over a year. I've told everyone I know who bought homes in years past they should refi now.

Go troll elswhere punk.

Don't forget there are substantial closing costs in refinancing. You HAVE to do the math, based on the equity in your house and the closing costs compared to what you will save, to see if it really saves you money.

Yes, thats correct, about $3000 in closing cost and I'm only borrowing about 50/50, loan amount/value. The rule of thumb I think is you will recover your closing cost in interest saved over 5 years if you drop 1 point of interest. I dropped over 2 points so I should recover that much faster.

 

[Sunshine7388]

Another thing to consider is will your PMI go up.

When I bought my home it was lower than it is now. Right now our PMI is under $50, if we were to refi it would be close to $100.

There are alot of things to consider when refinancing, but you are right, interest rates are pretty low right now, and there is no telling when they will go back up.

If anyone is considering refinancing, call a lender and ask if they would mind doing a cost sheet for you, so you can see what your new payments would be and all the closing costs.

 

[RidgeHunter]

These rates are unreal. So are real estate prices - if I had a dime to my name I'd be buying houses and land around Tulsa like mad. Smart real estate investors stand to make a fortune in ths next few years. Count on it.

I went to refi, pulled info my house and decided I'm sick of my neighbors. Why not just just get a new mortgage. Listed it and had a contract in a week. Now shopping for a house in an area I think will skyrocket in 5-10 years. Poor man's investing one home at a time.

 

[okietool]

Make sure any extra you send is specifically applied to the balance only. I would send two checks.

 

[CHenry]

Another thing to consider is will your PMI go up.

PMI isnt applied unless you are borrowing more than 80% of the value. Thats the rule at my Credit union anyway, different lenders may have different rules on that. If your paying PMI I would bet your dont have more than 20% equity in your home which means it may be worth getting an appraisal to see if the house has increased in value and you could possibly be done paying that insurance.

 

[CHenry]

Make sure any extra you send is specifically applied to the balance only. I would send two checks.

I make payments online and yes, it asks me to check a box for principle only or for interest.

 

[Sunshine7388]

PMI isnt applied unless you are borrowing more than 80% of the value. Thats the rule at my Credit union anyway, different lenders may have different rules on that. If your paying PMI I would bet your dont have more than 20% equity in your home which means it may be worth getting an appraisal to see if the house has increased in value and you could possibly be done paying that insurance.

Yep, but it's something to look at. How much PMI is changed I believe in April of this year.

My post was more for those that have owned their home for less than 4 years. We've had ours for just over 3 now.

When I looked into refinancing to try to drop our 5.5% interest rate we decided it wasn't worth it, b/c it wouldn't save us enough money to justify paying more in PMI, we just make extra payments.

Our lender was just going to use our previous appraisal from when we bought it, since it was relatively recent. A new appraisal probably wouldn't help us much anyway, alot of short sales and foreclosures in our neighborhood in the past year.