Do we lock in our 30 year mortgage rate today or wait?

[CalDisneyMomof2]

Call your lender. You may be able to pay for an appraisal and have the PMI removed without a refi. We did that 6 months after we moved in without a refit. It is not part of the loan.

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Unfortunately that is not an option for us. We have an FHA backed loan and because of that we'd have to refi to get out of it. We already reached out to him months ago about it and just doing an appraisal is not an option.

 

[Hofmanns4]

Unfortunately that is not an option for us. We have an FHA backed loan and because of that we'd have to refi to get out of it. We already reached out to him months ago about it and just doing an appraisal is not an option.

Bummer! I figured it was worth a shot to mention it. Good luck!

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[Shelly F - Ohio]

Question: We are at 3.25% and I know it sounds silly to consider refinancing right now but we have 5 years left on our mortgage with a PMI. Our PMI is $446 a month. If we refinance, we will save approximately $441 a month for the next five years PLUS we'll be able to claim more on our taxes with more interest for the rest of the loan. My dilemma is, my husband is the primary on the mortgage but his credit has dipped dramatically since purchasing with opening credit cards for things for the house etc. Mine, however, is in the low 700s, so decent.

Would we be able to refinance using my credit even though he is the primary on the original loan and makes more than I do? (About twice as much) When I type in all the numbers it all ends up coming out about even after 30 years with savings from PMI, but with more interest, but also more to claim on our taxes. Any opinions? I'd love to save an additional $441 a month right now!

Edit to add that we have contacted our lender but we haven't received a response since I'm sure he's dealing with a large number of clients right now. Just thought I'd get all of your opinions while we wait patiently.

I would refinance to get rid of the PMI. But why are you happy you would get to claim more on your taxes because you will pay more in mortgage interest. You must not realize you will pay more in mortgage interest than you will get back in taxes because you are claiming the mortgage interest.

For example on a $150K loan if you pay $4K a year in interest you will only get $800 back in taxes when you claim that MTG. interest.

A few years ago my sister was dead set that she did not want to refinance because she was counting on the money she would get back when she filed her taxes because of the MTG. interest she claimed. She always uses Turbo Tax and so do I so I know how that it will keep track of your refund every step of the way as you are completing your taxes.
I figured up what her new MTG would be as far as yearly taxes paid. We went back and redid her taxes using the old figure. Turbo Tax tallies up in the corner what your refund will be every step of the way. When we entered her current MTG interest amount we wrote down what her refund would be. Then we changed the MGT interest to be what the amount would be if she refinanced and she as shocked to see it showed that by not refinancing she would only get $800.00 more with her tax refund yet she would be paying more in interest because she did not refinance.

 

[Pea-n-Me]

Mortgage rates are tied to the 10-year Treasury yield. Treasuries are safe haven assets. The Dow was down 450 point or so at one point yesterday on bad economic news (retail sales fell and producer prices declined unexpectedly suggesting domestic weakness) coupled with Ebola news. When the market gets pummeled, people buy Treasuries (driving prices up and yields down) and mortgage rates fall typically. So ebola was involved in unnerving investors, but mortgage rates don't have much to do with airline stock prices.

Thank you for taking the time to explain this.

Well I've spent quite a few hours over the past few days trying to figure this out, and I finally got everything done this morning. Wound up sticking with our current bank/mortgage lender because it was easier, and in the long run, cheaper. (They also assured me that if rates go down further, they could adjust it in our favor.) Our payment will remain roughly same, but we'll wind up saving quite a bit monthly. Glad that's over with!

If anyone is thinking of refinancing, this is a very good time!

 

[southlakejr]

Question: We are at 3.25% and I know it sounds silly to consider refinancing right now but we have 5 years left on our mortgage with a PMI. Our PMI is $446 a month. If we refinance, we will save approximately $441 a month for the next five years PLUS we'll be able to claim more on our taxes with more interest for the rest of the loan. My dilemma is, my husband is the primary on the mortgage but his credit has dipped dramatically since purchasing with opening credit cards for things for the house etc. Mine, however, is in the low 700s, so decent.

Would we be able to refinance using my credit even though he is the primary on the original loan and makes more than I do? (About twice as much) When I type in all the numbers it all ends up coming out about even after 30 years with savings from PMI, but with more interest, but also more to claim on our taxes. Any opinions? I'd love to save an additional $441 a month right now!

Edit to add that we have contacted our lender but we haven't received a response since I'm sure he's dealing with a large number of clients right now. Just thought I'd get all of your opinions while we wait patiently.

DH and I are in a similar boat- we're refinancing out of an FHA loan to remove PMI (about 350 per month)

What our lender told me is that that they will take the middle score of the lowest person on the loan. So unfortunately, they will be using your husband's score. Also unfortunately, they use an older scoring model that will typically show your score as 20-30 points lower than what you are used to seeing. When he told me mine I freaked out. So be prepared for that. However, there is still a lot that you can do to get a decent rate by paying more in points, etc.

I think the biggest thing will be determined by what interest rate you can get, and what costs you will have rolled into your loan. For us, the biggest benefit was not the lowest rate offered to us, because it had more costs and fees associated with it, and so the overall payment was actually higher. We are going from 3.5 to 3.625, and it will eliminate nearly all of our PMI payment. Because you are at an even lower rate than we are- the difference in interest may be too high to really offset any savings, especially over the course of only 5 years. (we have 9 more... ouch!)

 

[CalDisneyMomof2]

DH and I are in a similar boat- we're refinancing out of an FHA loan to remove PMI (about 350 per month)

What our lender told me is that that they will take the middle score of the lowest person on the loan. So unfortunately, they will be using your husband's score. Also unfortunately, they use an older scoring model that will typically show your score as 20-30 points lower than what you are used to seeing. When he told me mine I freaked out. So be prepared for that. However, there is still a lot that you can do to get a decent rate by paying more in points, etc.

I think the biggest thing will be determined by what interest rate you can get, and what costs you will have rolled into your loan. For us, the biggest benefit was not the lowest rate offered to us, because it had more costs and fees associated with it, and so the overall payment was actually higher. We are going from 3.5 to 3.625, and it will eliminate nearly all of our PMI payment. Because you are at an even lower rate than we are- the difference in interest may be too high to really offset any savings, especially over the course of only 5 years. (we have 9 more... ouch!)

Thank you for all of that information! Bummer about the credit scores. His middle one would probably be like 620 I don't know how it got THAT low so quickly (and I check our credit/reports often).

And actually, about not saving. I plugged numbers into different mortgage calculators and such showing how much interest I'd be paying with each loan and at the end of it all, if you take into account how much we'd save on PMI and taxes from mortgage interest we'd come out about even. If we were to get a 3.8% rate we'd save $441 a month for the next five years. We'd actually be able to contribute more towards the principal and hopefully have our loan paid off in the original time we'd pay this one off. (We're just two years into our loan)

I guess we can just wait a couple more weeks to see if rates get lower and hope his score climbs a couple points (wishful thinking). If they got down to 3.5/3.6 range maybe we could get a 3.8 rate? Who knows. Thanks again for your response