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Interest rates are so low that money is almost free. I guess they’ll soon be paying us to borrow.

Are you refinancing now? Or waiting? Or have no plans to do so? Hmm, sounds like a job for a poll:


Update: Will lower interest rates help adjustable rate mortgage holders?

25 Responses to “Refinancing”

  1. Weer'd Beard Says:

    We bought our place in February when the numbers were about as low as they could go. Not much to save right now.

  2. countertop Says:

    Not refinancing, already have a 5% fixed rate loan on a 30 year mortgage and don’t think I can do better than that.

    I did go and grab a loan at 4% to do some much needed renovations on my house. And yes, they are paying me to borrow money – I didn’t need the cash right away so its sitting in a 4.5% 6 month CD at the same bank.

  3. Hartley Says:

    We paid our home off 2 years ago..woo-hoo! Now if only the market would recover so we can sell it, retire and go cruisin’

  4. thirdpower Says:

    Paid off. No need to worry about it.

  5. GrumpyUnk Says:

    Refinanced early this year. Rates would have to drop quite a bit. I’d be in for dropping the length of the note to 15 year if rates got low enough.

  6. drstrangegun Says:

    My mortgage rate is already low enough not to bother with, but I did sleep at a Holiday… uh, I did get a HELOC at a sweet rate to do some home improving with. And I’ve already spent 3/4 of it buying a metal roof that should outlast us all 🙂

  7. Les Says:

    The answer depends on what your current interest rate is, and how long you plan on staying at your current residence. Refinance charges are typically a couple thousand bucks. Each person has to ask themselves if the savings in interest charges is enough to cover cost of refinancing.

    We refinanced to a 15 year mortgage three years ago at 5.75% so we’re pretty happy, and we plan to move in the the next few years, so for us it doesn’t make sense to refinance.

  8. DirtCrashr Says:

    No, but only because it’s paid-off. We might buy another one for rental income though.

  9. karrde Says:

    Kind of hard to refi when I don’t own a house.

  10. Linoge Says:

    Better Half and I may be buying/building in the next six months… does that count?

  11. tgirsch Says:

    My rate is 6.0% (got it in late 2002), and the best rate I’ve seen advertised for a refinance is something like 5.2%. That’s not worth the hassle and the closing costs, as far as I can tell. If I could manage to refinance at less than 5%, and get rid of PMI in the process, I’d probably think about it. But I’m scheduled to be rid of PMI in about a year, anyway, so the $450 or so that I’d save on that is probably outweighed by the closing costs anyway.

    Speaking of PMI, anybody know what the terms for getting rid of it usually are? Is it a principal balance 78% of original loan value, or of originally appraised value, or of current appraised value?

  12. rdon Says:

    yes am in the early part of a 60 day process to refi and just floated it down from their initial offer of 5.375% to 4.75% based on the new drop by the fed. I had had one of those nasty loans that was running at 7 up to 9% that i had wamu convert to fixed 6.5% back last may. So this be one person who cleaned up his own nasty loan… and without a bailout mind you. If rates go lower, i expect them to bottom before end of january… and will float to whatever bottom rate i can get.

  13. Mary Says:

    PMI should end when your principal balances reaches the agree % of your purchase price for the house.

    Using your number on a $100,000 purchase price for the house, PMI should end when your principal balance is $78,000.

  14. Paul A'Barge Says:

    Refinancing: yes.

    Trying to get better than a 5% annual ARM. Here’s hoping.

    Capital Farm Credit quoted 6.5% on a 10 year ARM last week.

    Someone’s on drugs.

  15. mcg Says:

    The premium on jumbo mortgages is HUGE right now. Very unusual, but it means there aren’t going to be many jumbo refi’s until that imbalance settles. I’ve got a pretty good ARM so I’m not concerned but it would have been nice to jump to a fixed if the rates were there.

  16. Mama73 Says:

    I’ve heard its worth refinancing if rates drop to 1% less than what you’re at currently.

    Crossing my fingers and hoping for 4.5%.

    Hey, interestingly, because they’re toughening up on lending standards rental rates in our area (Chicago) have been going up. We might be able to rent our current place and buy another one. (Woo-hoo!)


  17. ThomasD Says:

    I’m currently in the process of a refi from 6.25 to 5.125 with 1% closing costs.

    Running my number on the Mortgage Professor’s site gives me 16 months to break even so I’m going forward.

    I had started the process just prior to the lastest cut so the final rate may actually be under 5%.

    With so many shoes seemingly waiting to drop I’m not going to hesitate any longer.

  18. Jackson Laurence Says:

    We purchased in 2003, on a 30 year loan at 4 7/8. If rates on the 15 year go down to 4.25% or lower, I’ll seriously consider refinancing down to a 15 year mortgage, if I can roll in the HELOC and still remain at 80% or better LTV.

  19. Denny, Alaska Says:

    I’m waiting for (don’t laugh!) 4.0%. We’re currently paying on a 4.75% loan (re-fied down from 5.5% in 2001), and I feel fairly confident that further (steep) drops are just around the bend. Things are still good here in Alaska; not many foreclosures.

  20. Daniel Wiener Says:

    I got a great rate four years ago with a 5/1 ARM at 4.5%. I’m looking to see how low rates go before refinancing. Ideally I’d like to switch to a 30-year fixed rate of 4.5% with little or no points or closing costs — effectively keeping my current loan rate but eliminating the risk of adjustments.

    Since I’ve got excellent credit and plenty of equity, I think I may actually be able to pull it off if rates keep dropping. Also, my deadline of February 2010 to refinance before my mortgage rate adjusts is now looking like a soft deadline. Checking the LIBOR rate, an adjustment as of today would only bump my rate to 4.67%. Who knows, by next year my adjustable rate may actually go down! (Although I’d still like to lock in a low rate.)

  21. Larry Patty Says:

    I got a 4.99 fixed rate 3 years ago. I locked in just before Katrina so I’m doing fine.

  22. edsel Says:

    they’re doing it all over again, setting up the next banking crisis, these rates leave no room for 30 years for banks to absorb interest rate hikes, its deja vu all over again.

  23. floquet Says:

    yes, mcg, when will jumbos come down? that’s what matters in high price areas.

  24. alex parkhurst Says:

    I am a mortgage loan officer for Wells Fargo. I have refinanced 30 mortgages in the last two weeks from 4.50% to 4.875% on 15 and 30 year mortgages. Call a local lender and refinance. It’s a terrific Christmas present for all Americans. I have doing this for 13 years and I can’t believe how low rates are.

  25. Judith Says:

    Just stopped by, nice blog!