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from: How to tell it's the right time to refinanceDeciding to refinance your mortgage can be a tricky task, as you can never be sure if the rates are going to drop further and if you wait, those rates just may inflate which means you missed out on a great deal. The financial industry is a best guess beast which makes it difficult for even experienced financiers to know exactly where the market it heading. So, how can you tell what the right time is to refinance is?
One rule of thumb is that if your current interest rate is not more than two points above the new rate, then refinancing will simply not save you enough money to justify the process. You will have to pay a new closing cost along with other fees such as appraisals and the amount of time it will take to pay that off may not be worth the refinance in the long run. If you plan to move soon then you may not be in your home long enough in order to pay off the expenses that it took to refinance. If this is the case, then it may not be the time to refinance.
There are other instances where refinancing is just simply not wise even if the interest rates are going down at a record rate. A bad credit score may result in not receiving the deal that you are hoping for. In fact, a bad credit score can even carry penalties and additional fees such as the need to purchase mortgage insurance.
If you happen to have good credit, a stable job, and a good history of payment you may want to consider refinancing based on where you live. Sure, interest rates are at an all time low, but if you live in a declining market such as Florida or California, the cost of refinancing will carry heavy fees, such as a hefty down payment. While this scenario may not be accurate for all parts of Florida, California, or other areas facing severe housing problems, it is definitely something to take into consideration.
Generally it is the right time to refinance if you live in an urban area that is seeing significant financial prosperity. If your credit score is over 650 or if your current mortgage, either a fixed rate or an adjustable rate is over 6 percent then now is the time to look into refinancing. Ultimately, the decision is yours. It would be wise to discuss all of your options with your lender or financial advisor before deciding.
Refinancing your mortgage just may save you hundreds of dollars each month, however if you do not act wisely and weigh both the positives and negatives, refinancing will end up costing you more money.
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Home Mortgage Refinancing Loans News
Jumbo mortgage loan rates put damper on refinancing (Boston Globe)
While plunging mortgage rates have spawned a frenzy of refinancing, borrowers with larger, so-called jumbo loans are still seeing interest rates in the 7 percent range, prompting many to abandon refinancing plans altogether or resort to creative transactions.
Read more...Home Refinancing Is Up In The Triangle (NBC 17 Raleigh)
The weak economy has driven interest rates to record low levels, which has caught the eye of some homeowners looking to refinance. Here in the Triangle, refi’s are up because there's still plenty of money out there to lend; but there's a catch. Mortgage officers say the criteria is tighter and lenders aren't offering specialty products like no income loans anymore. In other words, they're ...
Read more...Consider student loans before refinancing home (The Palm Beach Post)
Dear Liz: We owe $127,000 on a home that's currently worth more than $300,000. We have a daughter entering college in fall 2010. Her first year will be paid through an education account, her second through some of our savings. Years 3 and 4 are less clear, but we are certain we want to pay for the rest of her education. Should we refinance our home now, before its value falls further, and take ...
Read more...Residents refinancing to save money (Maumelle Monitor)
The recent action by the Federal Reserve to lower the interest rates has filtered down to consumers and resulted in a rash of Maumelle residents taking advantage of lower mortgage rates to refinance their home loans.
Read more...Low mortgage rates don’t entice buyers (Fort Worth Business Press)
As mortgage rates continue to flirt with 30-year lows, local lenders say they’re seeing a definite uptick in refinancing inquiries, but the historic low rates have done little to convince on-the-fence home buyers to re-enter the market.
Read more...Mortgage rates rock (Santa Fe New Mexican)
Santa Fe mortgage brokers and bankers are experiencing a rush of mortgage applications as borrowers react to lower rates by refinancing mortgages and, to a lesser degree, buying new homes.
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