Is there any minmum time I should wait for refinancing after my first loan if the rates comed down?

Asked by Muthu Krishnan, 94536 Mon Jan 5, 2009

And how much rate difference would make sense financially to apply for refinance? And how much refiancing would cost? Some of my friends told me that they have refinanced without paying anything. Is that possible?

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John J Dutra, , Fremont, CA
Tue Jan 6, 2009
Think of it this way - if you could refinance with no costs involved, you would refinance each time the rate was less than your own. But refinancing always costs - either in rate or in dollars. Pay for points - you will get a lower rate. Go no points and the rate will always be higher than if you had paid points. Currently there is a great difference between paying points and not - so the market is telling you that paying points is much more advantageous than ever before. Consider having your lender do a break-even analysis for you to determine if it makes sense for you to do a refinance. This should be done on any refinance . Also consider how long you are staying in the home before doing a refinance. The longer you are staying - combined with a shorter break-even, and it would seem to make sense to refinance your home.
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Jack Ferris, Agent, San Ramon, CA
Tue Jan 6, 2009
Muthu: We are a mortgage company out of San Ramon called Ferris Financial Group, Inc. Regarding your question, we can analyze your present loan to see if it makes good business sense to refinance your loan at this time. It may or may not be since it all depends on the savings and how long you plan on living in the home. Due to the costs involved in doing a loan there must be a pay back for the you.

We specialize in financing programs specifically for the purchase or refinance of homes. We have access to more lenders than most other companies. Our contact info is below:

Licenses and Certificates Held:

California Real Estate Brokers License

California Real Estate Officers License

Department of Corporations Lenders and Broker License

State of California Occupational License

Salesperson License for Manufactured Homes

Manufactured Home Dealers License

CAL VET Loan Certification

Here is our contact information if I can answer any more questions:

Jack Ferris
Ferris Financial Group, Inc.
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Luke Allison, , Asheville, NC
Tue Jan 6, 2009
Yes, it is possible to refi without paying anything but you make up for it in the interest rate. If you want the lowest rate available to you, then it would entail paying closing costs. Right now, most rates are around 4.875% and there may be a slight discount fee on that epending on the day. I would advise you to take the lowest rate available simply because rates like this may not be back around for a while.

If you have a conventional or FHA loan, there is not a prepayment penalty and you can technically refi 1 day after being on title. However, please note that the loan officer that did your current mortgage might be expensed a fee from the lender - not you. Lenders put stipulations on their loan officers as a means to prevent them from refinancing the same customer over and over. This protects the customer at the same time.

I would say that any rate greater than a 1% difference of what you have now would be a great advantage of you to take. Yes, it may take a year or 2 to recoup the costs of the refi vs. your monthly savings but if you are taking this new loan for the long term, then I would say that it will be a great investment.

Call me if I can help.
Luke Allison
Flagstar Bank

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