Home Refinancing
What are the guidelines for refinancing a home?
We bought our home in August of 2008 for 237,000, our apr is at 6.34%. Our monthly mortgage is 1,800. We want to refinance, but are not sure, since many places say they will only refinance a percentage of the home. Any help greatly appreciated.
It’s a great time to re-fi. Rates are below 5%.
Just go and talk to a couple of lenders. A good mortgage officer will take the time to look over the numbers and discuss your specific situation to see if a re-fi is something you should do.
With rates as low as they are – if you are planning to be in your house at least 5 years, I’d look into it.
EDIT: with rates as low as they are – even people with excellent credit (such as I) are refinancing. I plan on being in my home for many years to come. Easily more than 5 years. My re-fi will reduce my payment by over 100 per month. That means I’ll make up all my closing costs in 2.5 years. Since I plan on being in the house much longer than that….it makes sense to finance.
Why should I spend the next 26 years paying 6% interest when I can re-fi now and get 4.3-4.5 and it only takes me 2.5 years to recoup all my closing costs? That means everything past 2.5 years is gravy.
Go talk to a reputable mortgage lender or two. It’s free. The only thing it costs you is time. And the mortgage lender will be able to look at your credit rating and discuss your specific situation. I went and met with 3 mortgage lenders before I decided on the one I wanted to use. With a loan of 237K, saving 1.3 points will shave a good bit off your payment. As long as you plan in being in the house long enough recoup more than your closing costs (usually at least 5 years) a re-fi and the associated closing costs can be worth it.
And if your loan is anything but a fixed rate…(such as an ARM, Interest only, balloon payment piece of cr@p mortage) and you will be in the house more than 5 years….it’s a no brainer (in my humble opinion).
Like I said- it does not cost you anything but time to talk to a mortgage lender.