Comments on: Refinancing Our Mortgage

By: Siena

Siena — Fri, 25 Jan 2008 19:24:06 +0000

I’m interested in this too. I have an adjustable that’s currently 4.75%–for just under 2 more years (5 year rate). I know I can’t refinance to that low a rate, but I think now I should go with a fixed rate–that being said, should I wait until my low rate ends? Or is it better to strike because fixed rates are low now?

By: MITBeta

MITBeta — Fri, 25 Jan 2008 14:22:49 +0000

I wish I could take advantage of this, but my home has lost value since I bought it, so I can’t refinance because I currently owe >90% of the value of the house. I have an 80/10 mortgage now. The only way I could swing it is if I came up with more cash to put down on a refinance so that I was back down under the 90% Loan to Value mark…

By: KC

KC — Fri, 25 Jan 2008 03:15:32 +0000

I’m one of those “subprime loan” folks (we had no money when we bought this house) and I have a balloon set to burst this coming Decemeber. However – my home has appreciated about 40% (even in a bad market) and my income has gone up considerably so that only about 15% of it goes to the roof over our head (banks recommend less than 30%). So I’m very thankful for the rate cuts. I’ll refi into a 15 yr fixed at an incredible rate. Too bad our home is small and we’re fairly certain we’ll move within the next 3-5 years. But still – that’s a good rate – and I’ll get savings anyway I can.

I’m waiting til next week though – most experts expect the Fed to cut rates again on Tuesday – but we’ll see. They certainly won’t raise them yet.

By: Sam

Sam — Thu, 24 Jan 2008 17:34:37 +0000

We also have been thinking about a refi (4 years into a 30 year morg. at 6.125%). We have been looking at trading to a 20 year mortgage but have not taken any steps to refi. Instead we are paying an extra $250 a month on the prinicpal (which basically accomplishes what the refi would dod of us) and continuing to watch rates.

If rates keep dropping we will probably move to refi.

By: Doug

Doug — Thu, 24 Jan 2008 16:26:22 +0000

Nickel –

The rates at PenFed seem excellent. Can you tell us a bit more about PenFed? I had never heard of it until your post.

By: Patrick

Patrick — Thu, 24 Jan 2008 02:34:47 +0000

Hmmm save $150,000, cut your obligation by 15 years, and only spend $225 more a month to do it? Amazing!

By: SingleGuyMoney

SingleGuyMoney — Thu, 24 Jan 2008 01:19:14 +0000

I too am thinking about refinancing but I think I will wait a little longer. I want my credit score to be as high as possible and I want to see if the rates decrease a little more.

By: nickel

nickel — Thu, 24 Jan 2008 00:31:55 +0000

No, we didn’t seriously consider waiting until later. There’s no guarantee that longer term rates will go much further, and in the mean time we’re paying 6.375%. I’m content to shave 1.5% off our rate even though we could conceivable squeeze out a bit more (but might also lose ground).

By: livingalmostlarge

livingalmostlarge — Wed, 23 Jan 2008 21:40:19 +0000

The rate cuts will take awhile to affect the long term mortgage rates. So did you consider not locking but floating until later?

By: Llama Money

Llama Money — Wed, 23 Jan 2008 20:48:39 +0000

If that’s all you’re paying nickel, then it seems like an absolute no-brainer. How’s it feel to save a hundred and fifty thousand dollars?

By: pfodyssey

pfodyssey — Wed, 23 Jan 2008 17:40:51 +0000

Congratulations to everyone who is taking advantage of the lower interest rates. I also traded in my 30 for a 15 year mortgage some years ago and have not regretted it one bit. However, I do think there is a strong case to be made for sticking with a 30 year so you give yourself the flexibility of a lower payment (cash flow) while having the option to make additional payments (as you had been doing)when you can do so. It just really depends on your finances and how “tight” you can / want to be with them.

By: nickel

nickel — Wed, 23 Jan 2008 16:14:20 +0000

Llama: The only things we have to pay for are title-related (recording, title insurance, etc.) and the closing attorney. Everything else is waived/covered by the broker.

By: Llama Money

Llama Money — Wed, 23 Jan 2008 16:10:43 +0000

Good call on pulling the trigger. It’s like playing the stock market – you can’t ever time it, so there’s no sense in trying. The rate is fantastic now, and the fees are minimal ( or none at all – it was hard to follow ). Go for it, and enjoy the savings.

By: My Dollar Plan

My Dollar Plan — Wed, 23 Jan 2008 16:07:42 +0000

It’s always nice to get a lower rate and it’s a gamble exactly when to lock. How does the service at the broker stack up with PenFed? That’s one reason I love Penfed is because they are so easy to deal with… but a cheaper loan might be worth jumping ship.

By: greg

greg — Wed, 23 Jan 2008 15:22:44 +0000

So weird, I just emailed my lender after just getting my mortgage 2 and a half months ago, and I got my lock for .75% less, with them picking up all closing costs.

By: Clever Dude

Clever Dude — Wed, 23 Jan 2008 15:12:38 +0000

Although we spoke last night and you mentioned PenFed, I didn’t check who they were until this morning (from the link in this article). I said “Oh, Pentagon, I don’t work there). But lo and behold, my company is in the list of authorized employers! Woohoo! I’ll be opening up an account tonight and checking into rates as soon as I can.

I just worry whether we still have enough equity in our home to finance both mortgages into one.

By: DD

DD — Wed, 23 Jan 2008 14:38:48 +0000

What company was your mortgage broker with?

By: Frugal Dad

Frugal Dad — Wed, 23 Jan 2008 14:15:21 +0000

I think your timing is perfect, because as you mention the latest round of cuts really doesn’t impact mortgage rates (in the near to medium term). As for a long-term view, I can’t imagine rates getting much cheaper from here with rates at such historic lows (still). The only way to go from here is up, and by locking in that great rate you are safe for the next 15 years.

By: Lily

Lily — Wed, 23 Jan 2008 13:51:00 +0000

I don’t know much about mortgages, but thank you, thank you for recognizing that the Fed rate cuts are short-term and don’t directly impact long-term rates, like those that mortgage rates are pegged to. I felt nauseous when I read an MSNBC article that implied that the rate cut meant mortgage rates would fall (like, tomorrow). Anyway, good jorb!