Puddy Posted January 16, 2008 Share Posted January 16, 2008 I honestly can't believe that the markets aren't forecasting more inflation over the next few years than what is indicated by these low 30-year fixed rates. I guess the only way to explain is that they don't expect people will hold onto the mortgages for anywhere near 30 years. My only hope is that these rates hold out until the summer because I want to buy a house when I get back to America. When you coming back? In time for a Tiger game? Quote Link to comment Share on other sites More sharing options...
Big Country Posted January 16, 2008 Share Posted January 16, 2008 So I'm guessing that if I am in the 5th year of a 30-year fixed at 5.875% now may be a good time to shop around for a refi (it would not be a jumbo loan)? Quote Link to comment Share on other sites More sharing options...
untateve Posted January 16, 2008 Share Posted January 16, 2008 I'd refinance if I could get a 10 year, 4.25 mortgage. A few years ago I refinanced from a 30 yr 7.5 to a 15 year 5.25. I'm guessing I'm not going to refinance. Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 16, 2008 Author Share Posted January 16, 2008 So I'm guessing that if I am in the 5th year of a 30-year fixed at 5.875% now may be a good time to shop around for a refi (it would not be a jumbo loan)? It really depends on how long you are going to be in your home and what your current mortgage payoff is. Calculate what your new principal and interest would be at the lower rate. Subtract that from your current P&I. Divide that number into what your closing costs would be. Example: Refinancing lowers your payment by $120 per month. The cost to refi is $3300. Your breakeven point is 27.5 months. If you are planning on staying in the home significantly longer then 25 months, it probably makes sense to refinance. This is JUST a general rule of thumb. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted January 16, 2008 Share Posted January 16, 2008 I'd refinance if I could get a 10 year, 4.25 mortgage. A few years ago I refinanced from a 30 yr 7.5 to a 15 year 5.25. I'm guessing I'm not going to refinance. +1. Our numbers are near the same - 6.875% / 30 yr to 5% / 15 yr. I'd refi again if I could get 4.25% / 10. Quote Link to comment Share on other sites More sharing options...
yo mama Posted January 16, 2008 Share Posted January 16, 2008 Meh. With a $200,000 loan balance, even if you could shave a half a percent off the interest rate you'd only save like $1,000 in Year 1. And I'm assuming you'd roll the points/closing costs into the balance of the note. Are you really willing to go through the hassle, and increase the balance of your note a little, to reduce your costs by $83 a month? Seems like a lot of work for little benefit. But hey, everything is relative. If that covers the increase in your property taxes for the next couple years then perhaps the economics make sense. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted January 16, 2008 Share Posted January 16, 2008 As for the magazines, that was a brutal time for me and I'm still pretty pissed about it. how could getting a gay travel magazine as a prank be so traumatic for you? oh wait...now i understand....it moved, didn't it? Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 16, 2008 Author Share Posted January 16, 2008 OK Huddlers what is the best advice for my situation...... I am currently in a 30yr fixed with a rate of 5.75% I have been in this loan for the last 3 yrs after I did a refinance from a 6.375 to my current 5.75. I have only refinanced 1 time and originally had PMI that I now do not have. MY total loan ammount was 220K and my current payoff balance is aprox 200K today. If the rates are currently at 5.3 or what Miz is quoting , will it be well advised that I try to refinance again?? I really would like to lower my monthly rate but with my proerty taxes continuing to rise will it really make a difference to me other than saving a bunch of interest on the back end?? Any and all words of advice will be greatly appreciated. I would stay put, unless your for certain you are going to be in the home for over 7 years which is unlikely. If rates drop to 5%, then I would suggest refinancing. Quote Link to comment Share on other sites More sharing options...
yo mama Posted January 16, 2008 Share Posted January 16, 2008 (edited) how could getting a gay travel magazine as a prank be so traumatic for you? oh wait...now i understand....it moved, didn't it? Maybe he's agorahomophobic: fearful of going outside with gay people. Edited January 16, 2008 by yo mama Quote Link to comment Share on other sites More sharing options...
The Irish Doggy Posted January 16, 2008 Share Posted January 16, 2008 I honestly can't believe that the markets aren't forecasting more inflation over the next few years than what is indicated by these low 30-year fixed rates. I guess the only way to explain is that they don't expect people will hold onto the mortgages for anywhere near 30 years. My only hope is that these rates hold out until the summer because I want to buy a house when I get back to America. Yeah, the RMB to dollar exchange rate and China VAT changes should be making people think... Factories all over China have raised prices considerably in the last year with more to come. That has to show up on Wal Mart shelves this spring. Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 23, 2008 Author Share Posted January 23, 2008 30 year is at 5.125% today. Quote Link to comment Share on other sites More sharing options...
TimC Posted January 23, 2008 Share Posted January 23, 2008 Closed on a 30-year fixed August '06 at 6.5%. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted January 23, 2008 Share Posted January 23, 2008 Bloomberg.com reports U.S. mortgage rates dropped to levels not seen since the middle of the real estate boom in 2004, a day after the Federal Reserve's emergency reduction in interest rates. The average U.S. rate for a 30-year fixed mortgage fell to 5.31%, the lowest since March 2004, according to Bankrate. Quote Link to comment Share on other sites More sharing options...
Hugh 0ne Posted January 23, 2008 Share Posted January 23, 2008 I always thought that it only makes sense to refinance if you can gain about 1 point. So if you're at 5.75, it really only makes sense to refinance if you can get 4.75. Is that a good rule of thumb? Quote Link to comment Share on other sites More sharing options...
Hugh 0ne Posted January 23, 2008 Share Posted January 23, 2008 Closed on a 30-year fixed August '06 at 6.5%. Uh, I think you are going to be saving yourself some money in the near future. Quote Link to comment Share on other sites More sharing options...
TimC Posted January 23, 2008 Share Posted January 23, 2008 Uh, I think you are going to be saving yourself some money in the near future. All the crack you can smoke is on me!! Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted January 23, 2008 Share Posted January 23, 2008 Looks like 15 year rates are at 4.8% Quote Link to comment Share on other sites More sharing options...
Big Country Posted January 23, 2008 Share Posted January 23, 2008 I always thought that it only makes sense to refinance if you can gain about 1 point. So if you're at 5.75, it really only makes sense to refinance if you can get 4.75. Is that a good rule of thumb? Figure cost of refinancing - Fees, etc. Determine monthly amount saved - Current payment - new payment Estimate how long you realistically plan to remain in the house in terms of months. Multiply months by monthly savings. If that number is greater than the cost to refinance, go for it. If it is smaller, you are better off not refinancing. Quote Link to comment Share on other sites More sharing options...
Hugh 0ne Posted January 23, 2008 Share Posted January 23, 2008 Figure cost of refinancing - Fees, etc. Determine monthly amount saved - Current payment - new payment Estimate how long you realistically plan to remain in the house in terms of months. Multiply months by monthly savings. If that number is greater than the cost to refinance, go for it. If it is smaller, you are better off not refinancing. A simple yes or no would have been preferred. Quote Link to comment Share on other sites More sharing options...
Big Country Posted January 23, 2008 Share Posted January 23, 2008 Can someone explain points a bit more. I believe it is basically paying a percent of the total loan upfront to reduce the interest rate, but am unclear really. SO, for example, using the Yahoo rate comparer, they show various lenders by area, with fields for rate, APR, Fees, Points and monthly payment. The points field is two numbers, something like 0.478/0.000 or .5000/1.000 . Can someone explain just what that field is telling me when comparing the various available rates/offers? Quote Link to comment Share on other sites More sharing options...
twiley Posted January 23, 2008 Share Posted January 23, 2008 30 year is at 5.125% today. Locking this down right now with my mortgage guy and no closing costs. I'm currently at 6.5%. Quote Link to comment Share on other sites More sharing options...
Hugh 0ne Posted January 23, 2008 Share Posted January 23, 2008 Locking this down right now with my mortgage guy and no closing costs. I'm currently at 6.5%. Sweet. Party at Twileys! Quote Link to comment Share on other sites More sharing options...
twiley Posted January 23, 2008 Share Posted January 23, 2008 Sweet. Party at Twileys! Anytime..... within reason. Quote Link to comment Share on other sites More sharing options...
wiegie Posted January 24, 2008 Share Posted January 24, 2008 Figure cost of refinancing - Fees, etc. Determine monthly amount saved - Current payment - new payment Estimate how long you realistically plan to remain in the house in terms of months. Multiply months by monthly savings. If that number is greater than the cost to refinance, go for it. If it is smaller, you are better off not refinancing. If you just multiply the number of months by the monthly savings, you won't really get the right answer. What you need to do is figure out the present value of each future monthly payment and then sum those up. (e.g. saving $100 off a monthly payment that isn't going to be made for, say, 10 years is definitely not the same as saving $100 off a payment that you are making right now today). Quote Link to comment Share on other sites More sharing options...
Puddy Posted January 24, 2008 Share Posted January 24, 2008 If you just multiply the number of months by the monthly savings, you won't really get the right answer. What you need to do is figure out the present value of each future monthly payment and then sum those up. (e.g. saving $100 off a monthly payment that isn't going to be made for, say, 10 years is definitely not the same as saving $100 off a payment that you are making right now today). No way it makes enough of a difference when trying to cover closing costs of 2 grand. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.