Are you thinking about refinancing?

khorrell · 01-24-2008, 06:20 AM

With the plunge in interest rates, I am considering refinancing my mortgage. I'm sure many other people are thinking the same thing. It is so hard to decide, and there are so many variables: How long will we be in this house, do we refi for a lower payment to put more in retirement, or do we refi to pay off the house sooner?

What do you think?

MSMomsmoney · 01-24-2008, 06:59 AM

I just applied, and got approved yesterday to refi!

I went with PenFed. I love them.

My first is 30 year fixed 5.5% and my second was 5.99% 20 year fixed rate.

Im combining the two, into a 15 year, 4.625% fixed, no closing costs.

Total savings over the life of the loan, over $33K. My monthly payment increases by $60.

rstlne · 01-24-2008, 09:38 AM

I don't have anything to refi. I guess I could take advantage of this by getting a mortgage, if home prices would just hurry up and go down more.

PatGmac · 01-26-2008, 01:38 PM

I wish I could. My ARM is adjusting on 3/1/08 which is already 44% of my net pay before adjusting. Problem is, I killed my credit in the last 6 months and fell behind in everything including my mortgage.

iceclone · 01-26-2008, 10:23 PM

I am planning in refinancing my house too so I can get lower monthly rates. But I also ruined my credit score a few months ago by having too much hard credit pulls. My target date to refinance is August. By then, my score would have increased.

Julie Rains · 01-27-2008, 02:08 PM

I did what MSMomsmoney did several years ago, refinanced to get a lower rate and shorten my term. I am not refinancing now b/c I am near the end of the term and pay so little interest. Looking back (and reading all the financial advice on 15-year loans), I may have been better off to get the 30 year loan and have more available for investments -- but I had/still have investments and thought I might get sloppy with having extra money around.

If you can get a reduction in the monthly payments, then you can decide whether you want to accelerate your mortgage or invest more -- but you can do both; having a plan would be helpful. Of course you need to consider the closing costs as you mentioned (if you move soon, you may not recoup the costs).

The only other thing I would caution people about is this: refinancing a larger amount than your original mortgage based on increase in your home's value. I know it may make sense to borrow at a low rate and invest to get higher returns, but if you aren't disciplined with saving and investing, then you'll just keep pushing out the mortgage payoff date. I say that b/c I know people my age who have 20 more years on their mortgages (granted they can sell the house and pay it off but discipline earlier on would have allowed them to have no mortgage and investments).

Still, if I were just a few years into a mortgage, could get a lower rate/payment, I'd refinance.

cccdude · 01-27-2008, 03:55 PM

Now is a great time to refinance. Rates are still at historic lows.

greenjenn · 01-27-2008, 11:18 PM

We are looking at refinancing also. Have a couple good faith estimates...we are in an ARM right now and want a fixed. Not sure if we should hold out a little longer to see if they drop anymore. I think we will probably just do it. Hopefully our credit is still where it should be.

KristenKP · 01-28-2008, 03:34 AM

I've been debating it, but our game plan has always been to move into a different condo back in the city in late 2010, which is when our 7-yr fixed ARM starts to adjust, and we're still on track for that to happen. So I'm not sure the closing costs would be worth it if we're just going to go through the whole thing again in two years.

But I'm not sure at all.

singlemomindebt · 01-30-2008, 08:24 AM

Not to be Ms. Gloom and Doom, but I've had a few friends in the banking industry mention the high number of people who are coming in to refinance with 1 or 2 year old 100% financing mortgages who are being denied upon appraisal. Housing prices are dropping and some folks are discovering that the new prices are lower than what they have for a mortgage. Banks don't allow refinancing if you don't have enough for collateral. I'm not saying it's not worth a try, but don't be shocked if this is a situation you're in...

Sarah

01-24-2008, 06:20 AM	#1
khorrell Senior Member Join Date: Jan 2008 Location: near Washington DC Posts: 608 Thanks: 0 Thanked 2 Times in 2 Posts Reputation: (85)	Are you thinking about refinancing? With the plunge in interest rates, I am considering refinancing my mortgage. I'm sure many other people are thinking the same thing. It is so hard to decide, and there are so many variables: How long will we be in this house, do we refi for a lower payment to put more in retirement, or do we refi to pay off the house sooner? What do you think?

01-24-2008, 06:59 AM	#2
MSMomsmoney Member Join Date: Jan 2008 Location: Pacific NorthWest Posts: 44 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (13)	I just applied, and got approved yesterday to refi! I went with PenFed. I love them. My first is 30 year fixed 5.5% and my second was 5.99% 20 year fixed rate. Im combining the two, into a 15 year, 4.625% fixed, no closing costs. Total savings over the life of the loan, over $33K. My monthly payment increases by $60. __________________ It's not about having what you want, It's about wanting what you have.

01-27-2008, 02:08 PM	#6
Julie Rains Wise Bread Blogger Join Date: May 2007 Location: North Carolina Posts: 401 Thanks: 1 Thanked 0 Times in 0 Posts Reputation: (189)	I did what MSMomsmoney did several years ago, refinanced to get a lower rate and shorten my term. I am not refinancing now b/c I am near the end of the term and pay so little interest. Looking back (and reading all the financial advice on 15-year loans), I may have been better off to get the 30 year loan and have more available for investments -- but I had/still have investments and thought I might get sloppy with having extra money around. If you can get a reduction in the monthly payments, then you can decide whether you want to accelerate your mortgage or invest more -- but you can do both; having a plan would be helpful. Of course you need to consider the closing costs as you mentioned (if you move soon, you may not recoup the costs). The only other thing I would caution people about is this: refinancing a larger amount than your original mortgage based on increase in your home's value. I know it may make sense to borrow at a low rate and invest to get higher returns, but if you aren't disciplined with saving and investing, then you'll just keep pushing out the mortgage payoff date. I say that b/c I know people my age who have 20 more years on their mortgages (granted they can sell the house and pay it off but discipline earlier on would have allowed them to have no mortgage and investments). Still, if I were just a few years into a mortgage, could get a lower rate/payment, I'd refinance. Last edited by Julie Rains; 01-27-2008 at 02:09 PM. Reason: clarification

01-27-2008, 03:55 PM	#7
cccdude Junior Member Join Date: Jan 2008 Posts: 16 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Now is a great time to refinance. Rates are still at historic lows. __________________ Choose Credit Cards \| Official Partner of Credit Card Issuers Credit Cards \| Credit Card Offers

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01-24-2008, 09:38 AM	#3
rstlne Senior Member Join Date: Jan 2008 Location: New Jersey Posts: 368 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (115)	I don't have anything to refi. I guess I could take advantage of this by getting a mortgage, if home prices would just hurry up and go down more.

01-26-2008, 01:38 PM	#4
PatGmac Junior Member Join Date: Jan 2008 Location: Canton, GA Posts: 3 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	I wish I could. My ARM is adjusting on 3/1/08 which is already 44% of my net pay before adjusting. Problem is, I killed my credit in the last 6 months and fell behind in everything including my mortgage.

01-26-2008, 10:23 PM	#5
iceclone Junior Member Join Date: Jan 2008 Posts: 11 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	I am planning in refinancing my house too so I can get lower monthly rates. But I also ruined my credit score a few months ago by having too much hard credit pulls. My target date to refinance is August. By then, my score would have increased.

01-27-2008, 11:18 PM	#8
greenjenn Junior Member Join Date: Jan 2008 Posts: 2 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	We are looking at refinancing also. Have a couple good faith estimates...we are in an ARM right now and want a fixed. Not sure if we should hold out a little longer to see if they drop anymore. I think we will probably just do it. Hopefully our credit is still where it should be.

01-28-2008, 03:34 AM	#9
KristenKP Junior Member Join Date: Jan 2008 Posts: 4 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	I've been debating it, but our game plan has always been to move into a different condo back in the city in late 2010, which is when our 7-yr fixed ARM starts to adjust, and we're still on track for that to happen. So I'm not sure the closing costs would be worth it if we're just going to go through the whole thing again in two years. But I'm not sure at all.

01-30-2008, 08:24 AM	#10
singlemomindebt Junior Member Join Date: Jan 2008 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts Reputation: (10)	Not to be Ms. Gloom and Doom, but I've had a few friends in the banking industry mention the high number of people who are coming in to refinance with 1 or 2 year old 100% financing mortgages who are being denied upon appraisal. Housing prices are dropping and some folks are discovering that the new prices are lower than what they have for a mortgage. Banks don't allow refinancing if you don't have enough for collateral. I'm not saying it's not worth a try, but don't be shocked if this is a situation you're in... Sarah