Question Details

David, Other/Just Looking in 98112

Is it a good time to refinance a 30 year fixed mortgage?

Asked by David, 98112 Fri Aug 22, 2008

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Hello David. The answer to your question really depends on what your current loan terms are and how long you intend to keep the house. The first thing you want to know is whether your current loan has a prepayment penalty and how much that is. If there is a prepayment penalty, your current lender might be willing to waive it if you get the refinancing done through your current lender. Next, you want to find out what fixed interest rate you'd qualify for and compare it to your current interest rate. You'd also want to find out how much it would cost you to get the loan (closing cost). Then figure out how long you'd have to stay in the house to at least break even (compare the savings of the new loan and the closing cost). I'd just talk to a mortgage broker about your options. There's no harm in knowing. Good luck to you.
1 vote Thank Flag Link Fri Aug 22, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
It depends...what are your payments long have you had the current mortgage...whats the value of your property vs. the loan amount you need to refinance/roll in closing costs? Without further details...the answer to this question could be the wrong one for you.

I highly recommend you talk to a competent loan officer in your area. When I was a full time loan officer...I only helped clients refinance if it is to the client's best interest. Some loan officers might recommend it just to earn a commission. Find out how much you could save and how long it will take you to see the benefits after the closing costs are paid.

Good luck!
1 vote Thank Flag Link Fri Aug 22, 2008
Sounds simple, but it depends on what your rate is first, if you can save some ground thats the first step, however in this market, what would your home appraise for, if it is in a bad area it may come in lower than before thus you may need PMI insurance if its under the 20 % LTV ratio "loan to value"
0 votes Thank Flag Link Fri Aug 22, 2008
It may or may not. If you are solely seeking a lower payment, and your current interest rate is higher than one you could qualify for now, then it may be a good idea. Bear in mind that when you refinance, you also reammatorize your loan, which means the majority of your payment will once again be going to interest. There is also the cost of getting a new loan, which typically ranges from 1-2% of the loan amount. Things to think about > all the best!
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0 votes Thank Flag Link Fri Aug 22, 2008
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