Question : How do I know when its time to refinance my mortgage?
I just bought a home last October. I signed a single 30 year mortgage for 280,000. My interest rate is 6.75%. I have only made 3 payments on this mortgage. With interest rates dropping when is a good time to refinance?
- asked by Sean T
All Answers:
Answer #1
you don't have enough time into the mortgage -rates haven't changed enough to benefit you -refinancing usually costs money up front, whichcould take years to recoup depending on how muchyou are saving each month after you refi
- answered by Doctor Deth
Answer #2
Unless you can get 2% or better on a refinanceit's not even worth it when you do the math andall of the associated costs involved.6.75% ispretty good rate if you ask me as long as it is afixed rate and not an adjustable rate.The rates Ido not believe will drop anymore, if abything theywill be going up because this market cannotsustain its current path.Good Luck
- answered by e_businessolutions
Answer #3
Talk to a mortgage broker.The best way to find anexperienced broker in your area is to fill out theform at
http://www.MyMortgageSaver.comGoodLuck,Jon
- answered by John the helper
Answer #4
You must have heard about the Fed cutting theinterest rates again today :)The quick answer onrefinance timing is that you are not required towait any period of time before refinancing yourcurrent mortgage. However, most home owners dowait until they have some equity in their homesbefore refinancing. When making loan decisions,one of the most important factors potentiallenders review is the loan-to-value ratio, or LTV,of the proposed loan. This ratio compares theamount of the loan you are trying to obtain to thecurrent value of your home. The interest ratescharged on 100% loan-to-value refinance loans, aregenerally higher than the rates charged on loanswith a with lower loan-to-value ratios (it'sintuitive, since they are riskier loans for thelender). However, if your credit score hasincreased significantly since you first purchasedyour home (or if your income has risen), you maybe able to obtain a lower interest rate. Youshould contact several potential lenders todiscuss the loan terms they can offer you on arefinance loan. After speaking with severallenders, you should be able to determine whetheror not a refinance loan is a financially viableoption for you. Another problem encountered bymany borrowers trying to refinance their homeloans are early refinance penalties charged bytheir current lenders. Many loan agreements,especially “sub-prime” loans designed forborrowers with credit problems, state thatborrowers must pay a penalty to their currentlender if they wish to refinance their loan beforethe expiration of a certain period defined by theloan agreement. These “penalty periods” varyfrom loan to loan, but are frequently between twoto five years from the date of the originalmortgage.Before you attempt to refinance yourcurrent mortgage, you should contact your currentlender to discuss whether or not your current loanagreement includes a prepayment penalty, and ifso, its amount and when you can refinance withoutpenalty. These penalties can be quite costly, andcan easily make a refinance loan too expensive tosave you money over your previous loan. Again, youshould find out the amount of the penalty, if any,on your current loan, then contact severalpotential refinance lenders to discuss whether ornot a refinance loan is a practical solution foryou.
- answered by MmmmKay!
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