Mortgage Rates continue to drop!!!

[2mickeys1minnie]

We are at 5.375% now.....for all of you mortgage experts....it would only make sense to refi if it drops a full point, correct? Right now our bank is at 4.875%....I have a feeling it will drop lower......would 3/4 of a point save us money? I would really love to lower the montly payment and/or reduce the term.

 

[tmccullough]

I'm trying to decide, too. We can get 5.125 today @ Chase (we're at 6.5). Will they drop lower...that is the question. They say we don't have to pay closing...but remember "there are no free lunches". You still have to pay Title, etc...so saying you aren't paying closing costs isn't really being honest.

True... but we refinanced in Oct. 2007, lowered our payment, and cut 5 years off the loan with the no closing cost refi with Wells Fargo. We went from 8 to 6.5 percent. I'm waiting on a call from them today for a possible 2nd refi... a no lose situation IMO. Also, for those who haven't done the easy refi through Wells Fargo, I have never in my life been through such an easy process. Wells Fargo did everything! All they did was a credit check (if there was an appraisal, I never saw it - I think they just pulled it off the web I guess?). Then, there is no attorney involved at all so no fees that way. They sent us 2 hugely thick booklets with tabs showing where to sign,etc. and then we only had to have a notary public sign in a couple places basically witnessing that we are who we say we are which we did at our local bank. Let's face it... even as big as Wells Fargo is, they're bending over backwards to keep their current clients. I'd also suggest telling them that you've been offered excellent rates elsewhere. HTH

 

[princessmorgan]

Let's face it... even as big as Wells Fargo is, they're bending over backwards to keep their current clients. I'd also suggest telling them that you've been offered excellent rates elsewhere. HTH

I wish someone would tell me who they are speaking with at Wells Fargo, because our guy is no help at all! And this is our second mortgage with them.

 

[tmccullough]

I wish someone would tell me who they are speaking with at Wells Fargo, because our guy is no help at all! And this is our second mortgage with them.

I just called the toll-free number from their website. If you go to their main page, check today's mortgage rates and to the right, there is a box with a toll-free number for current customers who want to do their easy refi. I'd post the number but don't know if it's allowed. When I called them, they are so busy that they are screening calls, taking your loan number,etc. and forwarding it to a loan officer who will call you back within 48 hours. They haven't called me back yet but it's only been 24 hrs. HTH

 

[Pennykay]

Ok, I realize that this is probably a stupid question, but if you have an ARM and interest rates are dropping, why wouldn't the ARM decrease?

 

[princessmorgan]

I just called the toll-free number from their website. If you go to their main page, check today's mortgage rates and to the right, there is a box with a toll-free number for current customers who want to do their easy refi. I'd post the number but don't know if it's allowed. When I called them, they are so busy that they are screening calls, taking your loan number,etc. and forwarding it to a loan officer who will call you back within 48 hours. They haven't called me back yet but it's only been 24 hrs. HTH

Thanks!

 

[minnie1928]

We are at 5.375% now.....for all of you mortgage experts....it would only make sense to refi if it drops a full point, correct? Right now our bank is at 4.875%....I have a feeling it will drop lower......would 3/4 of a point save us money? I would really love to lower the montly payment and/or reduce the term.

You really need to do an amortization table (you can google for one) to see what the difference would be for you. There are too many variables to say that dropping x% would make it worthwhile. It depends not only on the rate, but the principal, the fees to do the refi, the amount of time you plan on spending in the house, etc.

What I would do is this:
1. Use an amortization table to determine what your new payment would be if you refinanced.
2. Compare that payment to your existing payment to determine your monthly savings.
3. Using the lenders good faith estimate of closing costs, divide the closing costs by the monthly savings from #2.
4. That's how many months it will take you to re-coup the cost of refinancing, after that it's all good. Looking at that time frame, do you still plan on being in your house after that period of time? If so, then refinancing would probably be in your best interest.

 

[RitaE]

If you are in the Chicago area, Liberty Bank has 10 and 15 years with 0 points 4.875% today.

If you have at least 25% equity they have a 10 year @ 4.5% with 0 points, APR 4.637%.

http://www.libertybank.com/rates.aspx#1530

 

[tedhowe]

Ok, I realize that this is probably a stupid question, but if you have an ARM and interest rates are dropping, why wouldn't the ARM decrease?

One reason is that most ARMs have an artificially low "teaser" rate at the start of the load that is below the normal spread from whatever benchmark they use (t-bills, LIBOR or whatever they use).

This gets people into the ARM at an especially low initial payment, but almost guarantees that the payment will go up at the first (and sometimes second) adjustment.

There may be some ARMs that will not adjust up with the current interest rates, but most will.

We got lucky when we bought our first house - back in 1996 - we had a 1 year ARM - with that short of a lock at the start, it wasn't too artificially low - the rate stayed virtually the same the first year (it went up slightly as I recall) the second year it went down slightly, but interest rates were so much lower to allow that to happen then when we bought, that we very quickly did a Well streamline refi into a 30 year fixed.

 

[Chicago]

RitaE -

I live in Chicago. Did you personally refinance with Liberty? If so, will you pm me your contact?

I'm not sure if I should refinance. I have 15 years left on a conventional loan at a rate of 5.25. I don't plan on staying in the house longer than 4 years. Any advice from you mortgage experts?

 

[paper1225]

THANK YOU OP!!!!!!
We just moved from 5.875 to 4.375! The 4.375 rate was the same for the 20 or 30 year fixed mortagges. (We didnt ask about the 15 year)
I am SOOOO happy!

We are at 5.875 right now too--can I ask about the 4.375....ie, how much did your payment drop? any points involved? it is a fixed rate right? and who did you get that great rate from? we currently have countrywide and have for every house we have owned for the last 15 years, would like to keep loyal-but not sure if that is the best way to go at this point in the economy!!TIA

 

[RitaE]

RitaE -

I live in Chicago. Did you personally refinance with Liberty? If so, will you pm me your contact?

I'm not sure if I should refinance. I have 15 years left on a conventional loan at a rate of 5.25. I don't plan on staying in the house longer than 4 years. Any advice from you mortgage experts?

No, I've just been watching local rates closely, I have about 22 years left on a 30 year mortgage at 5.5%. Harris Bank is still above 5%. I'd like to drop down to at least a 15 year. Most 10 year rates I have seen are the same as the 15 year fixed, so I figure I might as well go with a 15 year and then try to pay it like a 10 year. We have no plans to move, so it is definitely worthwhile for us to go through with a refi for the lower rate.

 

[left210]

THANK YOU OP!!!!!!
We just moved from 5.875 to 4.375! The 4.375 rate was the same for the 20 or 30 year fixed mortagges. (We didnt ask about the 15 year)
I am SOOOO happy!

What company are you with and do you have a contact name and #?

 

[mzspaz]

paper1225, I am right there with you at 5.875% through Countrywide. We are 4 years into a 30 year loan. It would be nice to get our monthly payments lowered, so I am keeping an eye on things.

Funny thing is.....I haven't heard from Countrywide in about a year regarding refinancing. We used to get calls from them all the time. But 2 days ago I visited their web site in order to check their rates and see if they were offering any deals. Since then, they have called 2 times and sent us mail.

I'll be keeping an eye on things and will see if Countrywide is willing to do anything for us since we are good customers, put 20% down, and have paid on time every month.

 

[princessmorgan]

I just talked to Wells Fargo. They quoted a rate of 4.75% for 30 year fixed. No points. Does anyone know if there is such a thing as a real no cost refinance? It seems that when you don't have to pay any fees, they either give you higher rate or roll your fees into the mortgage.

 

[CarolA]

Ok, I realize that this is probably a stupid question, but if you have an ARM and interest rates are dropping, why wouldn't the ARM decrease?

It might. My first ARM did just that the first time it reset.

However, the crystal ball doesn't always work and when rates go up so does your ARM. Plus most of them reset annually after the five year lock. So at some point.....You will be much higher the 5% and kicking yourself!

 

[crisi]

Ok, I realize that this is probably a stupid question, but if you have an ARM and interest rates are dropping, why wouldn't the ARM decrease?

Depends on how the contract is written as well.

Some won't decrease, they'll only go up. Some will only adjust once - either direction - which is great if the rate is lower when you hit your one time adjustment - others will adjust multiple times during the contract - which will create a lot of volitility.....

In general ARMs are a gamble....get a lower rate now hoping that the rate is lower when it does adjust - but interest rates can be pretty volitile and for a family that has a budget at the bone, the combination of an ARM going up by a 1% and adding $200 to their house payments - and gas at $4+ a gallon - it forced a lot of foreclosures this year....

 

[jennilouwho]

I'm 3 years into a 30 year loan at 6.37. I called Countrywide today and we are changing to a 30 year fixed at 4.5 percent with 2 points. We're actually going to pay it off in 15, but got a better interest rate with 30. So we now are paying about $80 more a month and it will be paid off 12 years sooner than planned, when my oldest graduates! Whoo!

 

[dizcrazy]

Paper1225:
Regarding our current 5.875 moving to 4.375....
Our payment dropped $330 a month on the 30 year.
I believe we are paying .5 (1/2 a point) I dont have the Good Faith w/ me
Yes, it is fixed. I triple checked that!
We have a financial advisor who worked with our mortgage broker. I am not sure which bank we ended up with - because one bank didnt even need an appraisal and that's the one our advisor wanted us to go with. I think the one bank was AMTRUST BANK in Cleveland, OH.

We live in Pennsylvania - I dont know if mortgage brokers can work in other states, but if anyone would like my brokers name, please PM me.

 

[LeslieG]

I just talked to Wells Fargo. They quoted a rate of 4.75% for 30 year fixed. No points. Does anyone know if there is such a thing as a real no cost refinance? It seems that when you don't have to pay any fees, they either give you higher rate or roll your fees into the mortgage.

What banks are offering no fee refinances?