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Mortgage Questions

"The 30-year mortgage averaged 5.01% for the week ending Jan. 8, down from last week's 5.10%."

I'm waiting for at least 4.5% but hoping for 4.25%. Any speculation on how low the rates will drop to? I'm at 5.5% now on a 30 year fixed that I got 5 years ago. I want to refi- and don't want to miss the boat, but a .5% decrease isn't enough for me yet or should I just jump on it?

I also heard that some lenders will "allow" you to "float" to a lower interest rate if you refi and the rate drops again within a certain time period. They'll allow you to do this once or twice during that time period. Is this true? Have you heard of this? Do you know what the qualifications are? Who does this? (heard Chase, but it may have been a special privilege)

Also, any good recommendations on a lender to go? Obviously, pref is to have no points. No fees also would be even better.

charlie
Mon, 12 Jan 2009 18:45:35 +0000

Are you going to be able to refinance without increasing the terms back to 30 years (or whatever term you had before)? Had you been able to keep your remaining terms when you refinanced before?

Chieh Cheng
Mon, 12 Jan 2009 21:06:18 +0000

??? that's not how refi's work. at least none that i've ever heard of. a refi generates a brand new loan, so you're usually stuck with the lender's standard loan packages, which are generally in 5 year increments, 5, 10, 15, 20, 25, 30, etc. sometimes 1 and 3 year too. but i'm sure they can work any terms you want depending on the lender. but nope, if i refi, i start over at 30.

charlie
Tue, 13 Jan 2009 01:10:39 +0000

That's what I suspected. In that case, have you calculated it out
whether a refi is worth it? What are all of the fees you have to pay
to go through a refinance?

Chieh Cheng
Tue, 13 Jan 2009 01:24:42 +0000

points, app fee, appraisal fee, doc prep, etc. etc.

see refi calculator:
http://www.bankrate.com/brm/calc_vml/refi/refi.asp

gnowk
Tue, 13 Jan 2009 03:05:45 +0000

From what I read in financial magazine, it's only worth refinacing if the new loan rate is .75 to 1.00 percent less than the old loan. The bank makes too much money from all the fees.

S
Tue, 13 Jan 2009 04:44:47 +0000

S's right. it's what I was told too.

sarcast
Tue, 13 Jan 2009 05:48:49 +0000

well ideally, i wouldn't pay any points and if you look hard you can find those that charge no fees. typically this was places like wamu, but well... no sense talking about the past. =T

ya, there's the idea of lost interest payments since you're restarting a loan, but the lower interest rate should help offset that. and you have to be in the mindset of well, am i going to actually pay this continually for the next 30 years to ownership? more than likely i will sell or refi again before then or buy it outright, but the likelihood of me continuing the same 30 year loan is not high.

charlie
Tue, 13 Jan 2009 06:10:51 +0000

I don't quite understand. Perhaps you can show me the numbers to the
different scenarios you are talking about.

I think, for me, the bottom line is all about the numbers. I guess
that's why I slant all my questions in that directions. Getting a
lower interest than anyone else feels good. But without numbers to
back it up, you might as well go out and buy some ice cream.

Chieh Cheng
Tue, 13 Jan 2009 08:00:54 +0000

ice cream? yum. when i bought my current home, my lender wells fargo didn't lock in the rate until he felt that it was low enough. we started at a time when it was 6.25% and he waited until it floated down to 5.875%, he said at the end of last week he could get me 5.25% with no fees b/c the fees are built into the rate. he could get me 4.75-4.875 with points. i tried to see if i could refinance my first home but he said that since it was an investment property, he could only get me something like 5.5-5.875%.

SL
Tue, 13 Jan 2009 16:43:12 +0000

Just wonder . . . what was the time frame when this went down?

Chieh Cheng
Tue, 13 Jan 2009 16:53:15 +0000

in october sometime.

SL
Tue, 13 Jan 2009 18:27:04 +0000

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