Hi Michele,

I agree - 5.25 is a good rate. Congratulations! Unless you can get a drop of at LEAST 7/8 - 1 point, a refi is just not worth considering.

Please note - if you DO have a loan with less than 20% down, then when you do get to the 20% point, you can get your PMI dropped. Your lender isn't going to let you know when this is - so you'll just need to keep an eye on it. I hope this helps!

Jeff

Michele,

I think it probably does not pay to refinance yet. However, typically after you have had the loan a year or more, you may be able to streamline down. My lender told me for $500 they could adjust the rate from floating to fixed. Contrary to popular belief my ARM went down to 4.12% this month for one year, but can float after that. I asked what I could do to fix it and they said send them $500 and they can fix for 5years again at about 5%. I could probably get a lower rate than that, but I would have to pay normal closing costs. So sometimes there are alternatives other than a straight refi. You can always call your current lender and ask, but typically what I've heard is they want the loan to be at least a year old before they make modifications.

Thank you all for your response. I agree that this is a good rate for our 30 year mort. I will make an extra payment per year and not worry about it.

Hi Michele.
To save money you could pay some extra money towards your monthly mortgage.
This would help lower the amount of interest you would pay.
Jeff

5.25 is very good and if you simply took the extra money that you were gonna have to spend on closing costs and apply it directly to the principal you will save greatly. Just making one extra bonus payment towards your principal a year can take your 30 year note down by almost 7 years.

My parents I believe set a very good precedent for me on how to handle a mortgage. They made the bonus payments they could for the first 8 to 10 years of the mortgage which brought there principal down considerably faster than traditionally and then they refinanced a much smaller amount over a shorter time period.

You're good at that rate. When you refi. there are always closing costs too which would take a year alone to recoup. Rates are not better to the point that would warrant a refi (4.875%)-ish.. Typically you'll want 2% points to make it worthwhile.

Michele,
To refinance you should save 2%.
I think you should stay where you are now, but that is entirely up to you.
Margaret

Michele,

That all depends on how long you plan on staying in your home. Is building equity or paying off the mortage more important? Do you want a lower monthly payment which you will have to pay for? Is it a 30 or 15-year note?

Many questions to be ansered before a solid answer can be given.

Please share more of the specifics for a good response.

Regards,

Dominick Dina
Broker/owner
Christian Realty San Antonio