Refinancing Home..help!!

[TLH1977]

A few years ago i purchased a condo and got a 30 year fixed rate at 6.25%. All i have been hearing is that interest rates are at a all time low in the 4.0's. Would i be smart to refinance? What does it entail? Would i go through my mortgage broker i worked with when i bought my place or with a bank? What does something like this cost me to do? There is an ad on our local radion station saying that is can be down for a one time price of 500.00? Any help would be appreciated..am totally lost when it comes to this but would love to save some money if its possible--THANK YOU IN ADVANCE!!

 

[Notatourist]

Go with a bank and under NO circumstances do an ARM. It's not worth it.

 

[dawson5]

have you looked at a refinance calculator? Usually they give you a good idea of what a new payment would be and what it would take to recoup the points and fees.

http://www.calculators4mortgages.com/mortgage-calculator/refinance

http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx



I would think the difference of 2.25% would be enough to justify refinancing. You might be able to keep your payment the same and lessen your 30 yr loan to a 15.

As for where to go, have you looked in your local paper? When we lived in Ohio, our Saturday paper had a good selection of lending agencies (banks, credit unions, etc.) and gave you a breakdown of the rates (years, points and a bit of the fees). You might find that. I live in Indiana now, we don't get this in the newspaper here. I can look online at all of the banks and credit unions, gives me a good idea on what it would cost to refinance.

 

[Golf4food]

A few years ago that condo was also probably worth a lot more than it is right now and you might very well be upside down in your loan, in which case nobody is going to refinance you at the moment anyway. Unless your condo is worth more than you owe you are most likely wasting your time right now. The days of banks doing refi's at higher than 100% value are - at least for now, and thankfully so - over. Good banks, anyway.

 

[ead79]

When we bought our home 2 years ago, we got a 30 year fixed rate loan at 6.75% (we had a higher interest rate in exchange for a lower downpayment). We just refinanced this month to a 30 year fixed rate loan, and the interest rate went down to 4.875%. This will save us a couple hundred dollars per month, which is great in my book!

You will need to pay closing costs (usually around 2% of the total loan amount), but those can be rolled into the loan total if need be. If you were happy with your mortgage broker you used before, then you can certainly use them again. Of course, you're also free to shop around for someone with a better rate. I would totally advise against getting an ARM--the rates are so low right now that you really want a fixed rate mortgage so you can lock in the low rate for the duration of your loan.

You may want to do a preliminary search online to see what comparable homes in your area are selling for currently--as a previous poster mentioned, you won't be able to refi if you're upside down in your mortgage.

 

[disneyfans95]

A few years ago i purchased a condo and got a 30 year fixed rate at 6.25%. All i have been hearing is that interest rates are at a all time low in the 4.0's. Would i be smart to refinance? What does it entail? Would i go through my mortgage broker i worked with when i bought my place or with a bank? What does something like this cost me to do? There is an ad on our local radion station saying that is can be down for a one time price of 500.00? Any help would be appreciated..am totally lost when it comes to this but would love to save some money if its possible--THANK YOU IN ADVANCE!!

Without knowing your equity in the condo and the market value, hard to tell you

 

[Christine]

Definitely shop around.

When I refinanced a few years ago, I went thru Lending Tree.com, which is an online service (free) that puts you in touch with many lenders. They will each give you a quote for an interest rate and your closing costs. You will see that some lenders are very competitive and your aim is to get the lowest interest rate coupled with the lowest closing costs.

I don't know if Lending Tree is still around. After I used them the second time they kind of put me off because I got a LOT of calls from mortgage companies and they wouldn't leave me alone. That did not happen on my first experience with them. It was probably not Lending Tree's fault and it probably had more to do with the change in lending practices that had occurred during that time--much more aggressive and predatory.

Just know that you will have to pay some sort of closing costs/points and you will have to have an appraisal done on your condo.

 

[Abbie]

I don't know how much things have changed but the general rule of thumb for refinancing is the interest rate should be at least 2 percentage points lower than your current rate, and you need to be planning to stay in the home for at least five more years (to recoup points, fees, etc).

Our interest rate is somewhere around 5% but DH keeps suggesting I check out the current rates because he's heard they are hovering around 3%. I will call the banker who originally refinanced our loan 10 years or so ago because I liked and trusted him.

 

[Luv Bunnies]

We are currently going through a re-fi. We're using a mortgage broker and it's going very smoothly so far. Our rate is going from 6 3/8% to 4.5% and our payment is dropping by $345 a month! The broker said our loan was fairly easy because we're only financing 17% of the value of our house.

You can start by calling your current lender and asking what kind of a rate you can get from them. If you have a good payment history, they will probably want to keep you as a customer. You can also call your broker and ask what they can find for you. I think it's definitely worth looking into with rates being so low right now.