By Admin on Jul 20, 2009 in Renting & Real Estate
WonderingTheMilkyWay94 asked:
I live in Virginia and recently purchased a home. This is my second mortgage. I had no idea how much mortgage rates had increased. I am paying 6.75 as compared to 6.125. Are mortgage rates expected to climb or is it possible for me to refinance and get back to less than 6.5? My credit is still the same and both mortgages were 30 years fixed interest.
I live in Virginia and recently purchased a home. This is my second mortgage. I had no idea how much mortgage rates had increased. I am paying 6.75 as compared to 6.125. Are mortgage rates expected to climb or is it possible for me to refinance and get back to less than 6.5? My credit is still the same and both mortgages were 30 years fixed interest.
It is hard to say the rates have risen siginficantly lately, if they follow the same trend as last year the rates will go down in the beginning fall. This is exactly what happened last year the rates went up at the beginning of the summer. You may want to look at getting a good deal now and not refinance later on. If you are going to be in the house for over 5 years then you may want to look at buying the rate down it may be cheaper then actually refinancing in a year for .25% where you will not save any money because of the cost to refinance.
nick k | Jul 20, 2009 | Reply
not sure if I understand your question… If you are paying 6.75% on the second you did well and if you are 6.125 on the first you are doing well for a 30 yr fixed – leave it alone. I am licensed in Virginia so if you need more help contact me and I will review this with you.
John T | Jul 21, 2009 | Reply
reputable theory is that in order to break even on a re-fi, you need to be able to reduce the rate by 2 points. This is due to the length of time it takes to recoup the fees involved with a re-fi. And don’t fall for the scam of getting a lower interest rate but having to pay points up front. You need to look at all the fees and charges and figure out if it makes sense to spend $2500 to refinance, get a lower monthly payment of say $20 a month. It would take about 8.5 years just to break even. Be happy at 6.75 that is a pretty good rate.
Mike O | Jul 23, 2009 | Reply
Rates are rising. Today the 30-yr fixed is at 6.625% on loans of $100K +.
For the record, your current rate is too high. I believe your loan officer made a lot of $$$$ on your deal. On May 1st the 30-yr fixed was at 5.875% – again for loans of $100K and more. That said, refinancing now would be foolish. Wait for rates to drop or refi into a shorter term (20 or 15 year fixed).
thinking-guru | Jul 24, 2009 | Reply
It’s tough to say if rates are expected to climb, stabilize or drop. What I am doing for my clients is having them use the equity to buy down their interest rates for maximum savings via refinancing if they are just looking ot lower their interest rate.
They are cutting the life of repayable interest DRASTICALLY and getting a fixed rate. If you have equity in your home, maybe you want to entertain this option. Talk to a mortgage broker or banker.
I just bought down a few of my clients fixed rates under 6% fixed for 30 years.
Good luck!
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mark w | Jul 28, 2009 | Reply