Mortgage-Refinancing-Its-all-about-Timing

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Mortgage Refinancing: It’s All About Time

Just like any other financial decision you have to make that you experienced, understanding when to re-finance your mortgage can make a world of difference. Alternately, knowing when it is not a good idea to apply for mortgage refinancing will ensure that you will not get screwed with any hullabaloos in the market.

In practical terms, mortgage refinancing is about preserving money on total loan amount and monthly mortgage fees but there is a good time to make a move.

The 2%-Rule
One of the best times in order to refinance your home is when you can get an interest rate that is two percent lower that what your current loan offers. If at all possible, 2% is enough to recoup the cost of the loan. However, there are specific requirements you must meet if you want to take advantage of reduced rates including your credit rating and the amount of fairness left in your home. Additionally, take note that you have to be in your properly to get a certain period of time (known as the break-ever period) to recover the cost you covered the new loan. As a common advice, avail replacing if the prevailing rate is low.

Clear Objective
Many homeowners wish to re-finance their mortgage simply because they have a goal in your mind. Some want to merge debt through refinancing. A common misconception is that if making such move will pay off debt. Wrong. Entering into consolidation only restructures your debt. So if you owe $10,000 from the credit card company, refinancing won’t pay them off it will just extend it through the life of your loan.

Property owners also refinance their particular mortgage because they want to switch from Provide to FRM. Adjustable prices can be a headache. For one thing, you cannot definitively understand what would be the prevailing price 12 months from now. So if the rate hits the lowest today, moving over to fixed rate mortgage loan is the best idea.

Understanding your goal doesn’t usually mean you have the right to take the loan. Sometimes, understanding would mean letting go of lower fee after realizing in which such move is unwise.

When to Refinance
Low rate is an excellent trigger to consider refinancing, but other factors have to matter. Refinancing costs money. In 2008, the nation’s average for closing cost on a $200,500 loan is $3,118 according to Bankrate shutting cost survey. This doesn’t include other fees such as insurance, taxes, as well as other dues.

To recover the cost and get the particular savings promised from your new mortgage, you must consider how many weeks are you willing stay on your property. For example, your loan will save you $150 on your monthly payment and the closing cost of your new loan is $3,118. It will lead you 21 months to recoup the closing cost. Monthly cost savings are influenced by several factors including items, credit score and price.

Tools
Mortgage hand calculators will help you determine how significantly savings you will get on a monthly basis with your new loan. These power tools are available online, free of charge.

Mortgage Consultant
Bad advice leads to bad credit credit card debt so make sure that you check with a reputable mortgage consultant to help you know if refinancing mortgage is really for you. Appointment is usually free and you’re under no obligation to continue working with an advisor if you feel unpleasant with him/her.

Comments: 70

  1. See January 29, 2013 at 7:18 am Reply

    I’m curious what equity percentage is needed nowadays for any mortgage re-finance or house. Also, if anybody has refinanced through ING recently, please share your experience.

  2. Lucrecia February 23, 2013 at 3:59 pm Reply

    Have you used CashCall for mortgage refinance?
    I looked at CashCall advertisement with very low mortgage rate and no closing cost. Their website is also showing same info. I saw a lot of complaint about CashCall for their personal loan business practices; I want to find out peoples experience about their mortgage business practice. Is there any hidden surprise?
    Thank you!

  3. Meta April 4, 2013 at 2:53 am Reply

    I am a loan officer for a mortgage company refinancing one of my clients. He is stating his income as he is self-employed. One of the conditions required by the lender is a 4506-T tax form. I forwarded it to my client, but he is hesitant to submit this form in fears of being audited by the IRS? What is the likelyhood of this actually happening and what would need to happen for the IRS to take such drastic measures? Otherwise I’m not sure why this is a requirement from the lender…
    Of course I haven’t been a loan officer for very long…if I had been in the industry for many years, I doubt I would be coming to Yahoo Answers to obtain smarmy replies from know-it-alls. But hey, you were all in the same boat at one point in your careers, right?

  4. Valda April 11, 2013 at 1:20 am Reply

    Interest rates going up makes bond prices go down, but Ginnie Mae funds will be investing new money in those higher rates, won’t they?

    If rates go up, won’t mortgage refinances (at lower rates) decline?

  5. Ervin April 17, 2013 at 3:22 am Reply

    I have told the PNC bank home mortgage officer to do a market analysis of the home price before processing the mortgage refinance. Now the appraisal declined and I have no equity on my home. Is it possible to get refund?

  6. Lesley June 11, 2013 at 5:06 pm Reply

    Hello all,
    i ‘d like to know how to best use mortgage refinance, and usually for what reasons people refinance. Also does refinance ultimately cost more? I don’t need to lower my monthly payment, so I don’t have any clear purpose in mind. It is just that I have heard a lot of different views on refinance. I hope to get some insights and analysis from you out there. Thank you.

  7. Darron July 2, 2013 at 10:06 am Reply

    5 years ago my husband at that time (now ex) refinanced on our marital home.
    Deed in his name and I signed the mortgage refinance indicationg I was the wife as per NJ Community Property but not the Note. I still live in home with our children but hasn’t sold for 3 years.
    Ex now wants to have a short sale. What are the tax ramifications and will I be required to pay taxes or will my ex?

  8. Charline July 4, 2013 at 11:49 pm Reply

    I’m planning to relocate, but current owe a mortgage for $50k. I also have a bankruptcy on my record thats a couple of years old. I’d like to find new home in the state I choose to live in. Would I be able to get a second mortgage or refinance my current home in order to pay for a new one?

  9. Mike July 4, 2013 at 11:49 pm Reply

    I am a soon to be college grad that is currently interviewing with Wells Fargo to become a Credit Manager in the Chicago land area. Is the mortgage refinancing market a strong place to start a career right now? Fill me in on your thoughts. If you could, please tell me if you are in mortgage refinancing business or not. Thanks , The more responses the better.

  10. Rosy July 29, 2013 at 2:52 pm Reply

    I am working with my original lender to refinance my house, but I’m curious as to what advantages I have of looking somewhere else. Can the rates be lower from one lender to another or does the market pretty much make it the same for all?

  11. Anton July 29, 2013 at 7:23 pm Reply

    I have been shopping for refinancing my house in NC. I have 3 lenders that I am interested in and they all want me to fill the application and pull my credit report. Lenders are BofA, Wells fargo, and an online Northpointe lender. so will this count as three credit checks or just one. And is it bad for me?

  12. Elmira August 1, 2013 at 6:15 pm Reply

    I’m trying to find out if you can see a second mortgage or refinance on a tax record.

  13. Bettina August 1, 2013 at 8:20 pm Reply

    There is a lot of talk about mortgage modifications, refinancing and new mortgage rules, but most info is so basic that everyone just keeps repeating the stuff already known. Can anyone suggest a place with more advanced and very specific articles stating the facts with references back to the primary sources?

  14. Blaine August 1, 2013 at 8:57 pm Reply

    loan modification, mortgage refinance, home mortgage refinance

  15. Emmy August 2, 2013 at 2:02 pm Reply

    We live in Ontario! We need an appraisal to re-finance our mortgage, and are unsure of what they look at on the property and what they base the value of the house on. Any tips would be appreciated!

  16. Tanner August 2, 2013 at 2:02 pm Reply

    Do banks do out of state mortgage refinancing?

    My current bank in Iowa does not do this, even though I have an account with them and they’ve met me before.

    Another bank I used to have an account with WILL do out of state refinancing for me, so I was just wondering if it’s the bank’s choice not to this? Or is it a law you HAVE to be in the state?

  17. Floretta August 2, 2013 at 2:04 pm Reply

    We have very good credit (my husband and I are each 750+), and need to refinance our home. When we purchased, my husband was newly self-employed and had to get a no-doc loan, so it isn’t a very good loan to have. There are so many radio commercials and other ads for mortgage refinancing. How do we pick one? We thought about the LendingTree.com or themortgagestore.net. Any advice?

  18. Lavon August 5, 2013 at 1:40 pm Reply

    Refinancing mortgage is not an easy decision, when is the best time to refinance ?

  19. Brandon September 7, 2013 at 6:37 pm Reply

    Is the mortgage refinancing market a strong or weak right now? Fill me in on your thoughts. If you could, please tell me if you are in mortgage refinancing business or not. Thanks , The more responses the better.

  20. Aron September 28, 2013 at 2:20 am Reply

    Where can I find the lowest interest rate for a mortgage refinance in Arizona? I would like to be able to look for it online.

  21. Edmundo November 20, 2013 at 2:44 pm Reply

    My brother helped me buying the house off. Now I need to finance the house to pay him back. Will this be considered a new mortgage, a refinancing or an equity loan (since they have different interest rates…)
    thanks!

  22. Ingrid December 8, 2013 at 2:59 pm Reply

    What can the president do to help other homeowners to get their mortgage refinanced. The banks refused to work with us because our home values are declined. I have been paying my mortgage on time every month, never default, just want a fixed rate, for three years I have been constantly contacting my bank to refinance, never get a positive result.

  23. Kareen December 18, 2013 at 10:22 pm Reply

    current house payment is 650. What’s better financially, paying an extra 500 per month on our 30 year mortgage or refinancing to a 10 year mortgage and paying 1150 per month? We are 3 years into our 30 year mortgage.
    the 30 year has 5.75%… and i used current rates for the 10 year.

  24. Lavern December 23, 2013 at 7:50 am Reply

    I have a high interest rate mortgage, but I am current on it. I owe about 90% of the value. Since the gov’t is offering a mortgage refinance plan to lower the rates, maybe I should not make payments for 90 days?

  25. Tommye January 4, 2014 at 7:50 am Reply

    Current rate of ARM interest is 5.125%. Would it better to go for 6.75% mortgage refinance at no closing costs, if I am planning to live in the same house for next 7 to 10 years?

  26. Werner January 4, 2014 at 7:50 am Reply

    And if you had, did the mortgage people had to issue themselves the checks to the credit cards or you did? Thanks.

  27. Danial February 1, 2014 at 11:22 pm Reply

    I am trying to refinance my existing home loan, plus a 2nd mortgage as well as a number of other loans, cards etc. I do have 2 defaults on my file, one paid and one unpaid. Has anyone been in a similar situation and how did they refinance

  28. Tierra February 2, 2014 at 1:36 pm Reply

    I’m two years into a 5 year ARM with an interest rate of 4.375%. I’m worried that interest rates will just keep climbing and that I’ll suffer for it in the long run if I don’t refinance. I do have a 2% cap per year after the fifth year. The rate could get to above 11% total if I don’t refinance. However, I just cringe at the thought of refinancing at a HIGHER rate, even though it may be better in the long run.
    Just to clarify, the ARM is fixed for 5 years (but can go up 2% a year after that) and I’m considering refinancing into a 30-year fixed loan, even though the rate will be higher.

  29. Felecia February 2, 2014 at 5:39 pm Reply

    my spouse is in process of refinancing on home. My credit score is slightly below to receive a certain rate. If he still does refinance and when my credit score goes up slightly can I be added to new mortgage? Can this be acheived without changing the percentage rate he locked in at?

  30. Boris February 14, 2014 at 1:34 am Reply

    Is it better to try and refinance with your current mortgage company or go out to another company and refinance? Does it really matter, will it be the same percentage rates anyways?

  31. Salena February 20, 2014 at 6:46 am Reply

    Would it be worth refinancing a home loan to get a lower rate? We could decrease the rate from 6.5 to 5.5 but it would add $12,000 to my current loan amount. It would remain a 30 year fixed. We’d also get to skip two months of payments (which is actually added into the loan, not really “skipped”); but it’s still money in hand. The current mortgage is less than a year old. Would the refinance be worth it?
    I forgot to say, there are no prepayment penalties. And the added money to the mortgage will make the mortgage more than the house is currently worth (though that may change eventually…hope I hope).

  32. Laci February 20, 2014 at 10:49 pm Reply

    Is there a cut off point dollar wise as to refinancing a mortgage? I”m currently around $64K with approximately 19 years left. Would like to refi to a lower rate on a 20 year term.
    Thanks.

  33. Luisa February 21, 2014 at 5:45 am Reply

    im in financial problems these days. My friend
    told me to refinance my house mortgage. please
    tell me what is it? what is the way to refinance
    my home mortgage?

  34. Damian February 21, 2014 at 10:46 pm Reply

    I bought a house with a friend of mine as co-borrower two years ago. I got married recently and want to take over the house and the mortgage. The house has two mortgages when it was purchased at 100% financing at that time. Rates are good. I called up the lending bank who holds both mortgages and they said I can assume the first mortgage but the second mortgage is not assumable. I have to refinance for the second mortgage.

    Another option would be to refinance altogether and combine the two mortgages into one under my name. But since the house was purchased almost two years ago, there has not been that much equity so in order to refinance I have to put down a lot of money. The bank can only finance 95%LTV.

    If I go with refinancing with the second mortgage, the bank will need 85%LTV maximum.

    Not sure what to do. What do you think?
    Thanks Christopher B.! But what is the Power of Attorney for?
    The first mortgage is a 30 year fixed, with 6.5% interest. The second mortgage is a 30 year fixed with 7.9% interest.
    My buddy got married too and intends to buy a house in a year or so. Hence the need to take him off the mortgage.

  35. Maragret February 22, 2014 at 12:32 am Reply

    need approval without government

  36. Cleopatra February 22, 2014 at 2:17 am Reply

    John and Jane each own 50% of a piece of property. That property has a mortgage. About 10 years go by and John is now taking all the responsibility for taking care of the property; other than being listed on the deed, Jane is not involved at all. John refinances the mortgage without Jane’s participation. Is Jane liable for that new mortgage? Or is Jane’s financial responsibility basically paid off when the first mortgage was paid off by the refinance? Or could Jane have been put on the new mortgage without her knowledge or consent?

  37. Lynnette February 22, 2014 at 2:17 am Reply

    Is there any length of time for refinancing a home that you just purchased?

  38. Jacquelyne February 22, 2014 at 2:17 am Reply

    I bought several houses in my time and therefore thought I was an “expert” on getting a good mortgage. Now I’m looking for a straight answer on the best refinance rate, and a mortgage broker says pricing on loans includes factors that “were not there even one year ago”, such as: FICO score, loan to value, loan amount, occupancy, etc.” Can a mortgage rate vary according to my FICO score (or would I just be rejected if my score is too low)? What’s going on? Why is it so hard to get a mortgage rate out of a broker or a web site?

    btw, I have great credit, 80% equity, live in the house, and want to re-fi $117k, in NC.

  39. Leta February 22, 2014 at 2:17 am Reply

    Since the deed is in my name but the mortgage is still in the Sellers name, how do I refinance it

  40. Raymonde February 22, 2014 at 2:18 am Reply

    I’ve heard from a friend that Obama came up with a new plan, anyone know what that is or about? Whats the right way to go to lower my payments without having to refinance? Thanks

  41. Aron February 22, 2014 at 2:25 am Reply

    when is it worth refinancing. i locked my 30 yr mortgage at 6.375 or 6.125 i have to look it up. it was a 157k loan. right now the rate is at 5.375 i think. the cost to refinance is $1300. the guy at the bank said that a good time to do it would be when the rate is at least 1% lower. he also said that i would make up the $1300 probably in the first year. any input on when to refinance would be great. thanks
    when is it worth refinancing. i locked my 30 yr mortgage at 6.375 or 6.125 i have to look it up. it was a 157k loan. right now the rate is at 5.375 i think. the cost to refinance is $1300. the guy at the bank said that a good time to do it would be when the rate is at least 1% lower. he also said that i would make up the $1300 probably in the first year. any input on when to refinance would be great. thanks

    I do all my banking at US Bank. I was told awhile ago that with each 1/8% rate deduction it’s about $5 less for the monthly payment.

    i wouldn’t be able to pay any fees out of pocket. they’d have to be added to the loan.

  42. Issac February 22, 2014 at 3:54 am Reply

    My mortgage payment is currently 4200 per month. I have two loans, one at 9.75 for 15 years and another at 6.75 for 30 years. I purchased my home in October 2006 (I know, I should’ve waited) and would like to refinance to make my mortgage payments more manageable. Can I refinance so early into my mortgage? Any ideas or suggestions would be greatly appreciated.

  43. Stacy February 22, 2014 at 4:33 am Reply

    I have a mortgage and a second mortgage with the same lender. The two of them put together put me upside down on my home, so refinancing both wouldn’t happen.

    The question is, to take advantage of today’s good rates, can I just refinance the second mortgage since it’s considerably less than the worth of my home? Are there any mortgage rules or anything else that would prevent me from doing so?

  44. Reginia February 22, 2014 at 4:33 am Reply

    I’ve heard from a friend that Obama came up with a new plan, anyone know what that is or about? Whats the right way to go to lower my payments without having to refinance? Thanks

  45. Cody February 22, 2014 at 4:54 am Reply

    home loan modification vs mortgage refinancing, are they the same thing?

  46. Shaneka February 22, 2014 at 8:13 am Reply

    – Just for my own info.

  47. Jesica February 22, 2014 at 8:48 am Reply

    I was in an accident and got behind on my mortgage. I was able to get countrywide to refinance my mortgage and roll my past due amount back into the note. A month after I refinanced I found out that my note was sold to bank of america. My new mortgage payment was suppose to take affect in May. BOA is not recognizing my refinance. They say that it may take up to 3 more months for them to approve the refinance. Now I’m worried that they are going to foreclose on my house. They are taking my payments but not cashing the checks. Is this legal for BOA not to recognize my refinance?

  48. Penelope February 22, 2014 at 8:48 am Reply

    I came across this question and have little idea has to how to structure it to solve the answers. Any help and comment will be greatly appreciated. Thank you 🙂

    Imagine you took out a mortgage in year 2000. The mortgage was for $600,000 (this is what they call a jumbo loan) at a 6% (fixed) interest rate for a 30 year loan. As you are no doubt aware, interest rates have fallen across the board and so have mortgage rates. Imagine this rate came down to 5% in 2010. Now, as always, we need to lay out an objective in answering the question. Let us stipulate that the objective of the individual is to minimize the sum total of interest payments. Answer the three questions below showing your calculations.
    1. Does it make sense for the individual to refinance (exactly 10 years after the initial mortgage was taken out)?

    2. What is the break-even interest rate? That is, at what interest rate would this individual be indifferent between refinancing and not refinancing?

    3. What other considerations might individuals take into account in the real world (other than minimizing interest payments)?

  49. Ted February 25, 2014 at 3:35 am Reply

    Is there anyone who would know about this?.. and what do I need to do about acquiring this refinancing? any help would be appreciated
    First of all Ms Angie.. I am paying the taxes the lien was issued because I had sub par reprensentation.. when I was trying to the taxes PAID… so before you judge and shoot off at the mouth.., ask a few more questions

  50. Shanna February 28, 2014 at 4:28 am Reply

    Is there anyone out there that knows about refinanacing a second mortgage? Being a first time homebuyer we were duped into taking out a 13.5% second mortgage on our home. I cant find any info on refinancing this type of loan besides companies who cant be trusted. Any info would help.
    to the smarty pants who wants to make comments about what i can can’t afford. you dont know what I can or can’t afford. the reality it my husband and i prob make more than the two of you combined! But it doesnt matter how much money you make if your credit score is low because we pay mostly with cash! And the way the loan was explained to us was NOT the way it turned out to be.

  51. Jaqueline March 7, 2014 at 11:34 pm Reply

    Hi All,
    I have a 5 yrs term mortgage that I got 2 years ago for a 4-plex I purchased. Last month I contacted an appraiser who appraised the property. Based on the appraisal the property is worth around 100K more than purchased. This means I can apply for refinancing and potentially take out some equity from the house.

    HERE IS MY DILEMMA:
    The mortgage is with excellent conditions – good interest. I got it through a mortgage broker with a big bank in Canada.
    I have 2 options for the purpose of refinancing: either contact the bank who provided the mortgage directly OR apply through a mortgage broker who can decide to work with different banks.
    The problem with going with a mortgage broker is that he already told me the new conditions will be worse than current conditions I have. If the current bank approved my refinancing application it would be with the same or better conditions! On the other hand, if I go with the current bank am I not taking a RISK THAT IF THEY DO NOT AGREE to refinance the property because I do not meet their criterias (I am self employed now), then they will also NOT automatically renew my mortgage in 3 years when term is over!? Note: if I do not contact them now, then my understanding is that the bank will automatically renew my mortgage since that is the law in Canada: as long as you pay all your mortgage payments on time, the mortgage is renewed automatically without the need to re-apply/go through the application process again!
    I’m just not sure if I contact them now for refinancing and fail, that they will not keep record of my new ‘bad’ information (i.e. self employed, less stable, etc. whatever caused them not to approve me) and NOT automatically renew my mortgage when the term is over!

    BOTTOM LINE I DO NOT WANT TO LOSE TWICE – ONCE NOT BEING APPROVED BY THE GOOD/BIG BANK NOW, AND SECOND DAMAGE MY CHANCE TO BE AUTOMATICALLY RENEWED IN 3 YEARS.

    THANKS & REGARDS.

  52. Gregg March 15, 2014 at 12:55 am Reply

    if you are going to refinance to a lower interest rate. how much lower should the rate be for it to be worth your while.currently 6.5

  53. Cassaundra March 15, 2014 at 12:56 am Reply

    Are refinancing and mortgage rates different? Also, is refinancing closing cost higher than mortgage closing when buying new home. I bought a home 10yrs-Fixed-ARM in June’07 at 6.25 and now the rates are 5.75. I will save $200 per-month if I get 5.75. Should I refinance? Advise please. I have good credit.

  54. Tessie March 15, 2014 at 12:59 am Reply

    We are looking to combine our first and second mortgage on our home. current first approx. $80,000 current second approx $60,000 house value @ $165,000 would also like to have a little cusion in the bank. With less than perfect credit who is our best choice of lender

  55. Britteny March 31, 2014 at 12:08 am Reply

    We bought our house 3 years ago with an interest only 80/20 5 year arm loan. We of course like many others are upside down by about $30,000. I have recently contacted Wells Fargo (our mortgage company) and they are saying that we can not refinance and really have no options at this time. This can’t be right? I thought there were programs made for just these problems? Can it be we’re really just stuck?
    Possibly buy a second home and walk away from the first?
    As of note, I am not in any danger of losing my house, or defaulting on the loan. Our credit scores are both in the 700s, our income is above 150K. We did not buy a house we could not afford either. We have over a 100K in savings but to throw 30K to counter the loss just sucks and I was wondering if there was another way around this, how can this be?

  56. Willy April 2, 2014 at 5:52 pm Reply

    I come to you in search of an answer as my banker seems is being very vague and untimely in getting me answer to my questions. My wife and I recently locked in our 30 year mortgage rate of 6.025%. With the rates dropping lower and lower we asked our banker if we could refinance at a lower rate (near 5%). She basically told us it would cost us more in the long run. I can’t figure out how she came to that. Assuming that rate deduction knocks off, say $120, a month (normally we pay about $1,625/mth); how would we end up paying more over 30 years? This is assuming we’ll still be paying about $1,600/mth that we budget for? Let me know guys…my bank recently pulled their ‘mortgage rate tracker’ from their site; which is adding to an already huge complaint list about my lender.
    Clarification/Update:
    -We built a new house and were under the ‘construction window’ until this past June when we locked into our 6.025% rate.
    -We’ve been living their for less than 2 years.
    -The banker spoke to my wife today (I’ll add as much as she remembers:
    -We are in a new credit ‘bracket’ with the bank…something they just started to do, apparently in the past couple months. She said the bank added these brackets after some mortgagees(sp?) could not complete payments…they’re stricter on their loans (we’ve been making payments on-time, plus extra to the principle).
    -She said the banker told her we have a different loan to house value (?) than we did when we transfered over from construction.
    -Right now (banker said) they’re only going as low as 6.3%, but she estimates with Obama’s new plan, if invoked, would drop the rate in our ‘bracket’ enormously.
    -We plan on retiring and living in the house the rest of our lives(60+ years)
    -Any suggestions on where to go?

  57. Graham May 3, 2014 at 6:33 pm Reply

    Does anyone have any suggestion? Where to look, what to stay away from or tricks of the trade. Made a poor decision on our present mortgage and don’t want to do a repeat. Am locked in on present note for 45 more days and then we want OUT. Looking for 15, 20, or possibly 30 year fixed. Am not interested in doing business with Coutrywide. Thanks for your help.

  58. Kristine May 7, 2014 at 5:29 pm Reply

    I am running into some hard times and want to refinance my mortgage is this the best way to save some money or should I wait I have only had my house for a year and need to save money somewhere any suggestions

  59. Scotty June 5, 2014 at 4:51 pm Reply

    When you refinance your home with another mortgage company then the one you have know, who lets them know you’ve gone with another mortgage company? Are there penelties? We are in a sliding rate and are trying to get into a fixed rate. thanks!

  60. Sherill June 14, 2014 at 12:11 pm Reply

    I have to opportunity to refinance my mortgage and cut my interest rate by 2% (7.5% to 5.5%), which will save me $350 a month. We have $265K left on a $271K loan. When all the closing costs ($3,900), insurance and escrow are rolled in, the cost comes to $281K. Are we making out on the deal or is this a bad decision? Side note: We are unsure of how long we will be living in the house. At LEAST the next 2-3 years.
    Additional Notes: The escrow payment is to replenish what is in there with the new escrow company. Lender says I will be receiving a check from my current escrow with essentially the same amount.

  61. Sebastian June 14, 2014 at 10:47 pm Reply

    I’m trying to get my stepmom to refinance but she said her co worker and some other people told her that when they tried to refinance, they went to banks but they all said that “Sure you can refinance but you have to come back in five years and do it all over again and pay refinancing charges/closingcosts/etc fees”.

    I’m thinking they were telling my stepmom about ARM rates or something to the likes of that. But FIXED rates are guaranteed Locked-In, right? Unchangeable, right?

  62. Billi June 14, 2014 at 11:19 pm Reply

    Hi I have a mortgate of around 2 years old and is a 30 year fixed rate at 6.5%. With interest rates being slashed right now and house prices dwindling it would make a lot of sense to be able to refinance the mortgage at a much reduced rate, lower the monthly premium but still pay (ie overpay) the same amount each month to the mortgage company thereby paying of the principle faster and possibly ending up in a few years time with some equity back in the home. If I leave it as is the market is going down as fast as I’m paying off the principle and am therefore no close to actually owning my home. The other alternative to over paying is refinancing at a 15 year fixed rate loan as that seems to be giving me around the same monthly payment as I’m paying out now.
    But the question is, with no equity in the house will my current (or even another) mortgage lender even look twice at refinancing (I understand that lenders are reluctant to give out loan to value ratios of higher than 70-80%)
    thanks

  63. Hollis June 15, 2014 at 1:31 am Reply

    I lost my job and was out of work for seven months. I got behind on my mortage payments and am on a pay plan at the bank.
    Will they let me refinance? I only owned the home for about two years?
    What is reconfirming your loan mean? Please help!

  64. Hung June 15, 2014 at 7:00 am Reply

    Our current 30-year mortgage is at 5.25% but I think we could get it down below 5%. We’re about 5 years into this 30-year mortgage and haven’t missed a payment (and don’t expect to). Here are my questions:
    A) Even if we got a loan down to under 5%, would it be appreciably different over the long-term from a financial standpoint?
    B) Are banks in existence that would allow a couple to refinance and pay zero fees? Over the course of even 15 years, banks make a lot of money from interest… why charge someone a fee? I realize it’s not up to me.
    C) If we maintain our 30-year mortgage… say we don’t wind up refinancing… does it save a person/couple a lot if they were to pay one or two extra payments a year? Loan amount 200k, interest 5.25%.

    Any advice appreciated.
    First responder: no, that site didn’t help. Why would you waste that 10 seconds of my life FOR me? Idiot.

  65. Donita June 15, 2014 at 9:27 am Reply

    based off of the most common outlook for the housing and financial markets, are mortgage and refinance rates going to decrease?

  66. Fidel June 18, 2014 at 3:07 pm Reply

    Where is a site that is simplified in answers regarding mortgages, loan companies, interest & everything else.
    Every time Hubby gets a letter offering to refinance us
    & lower our monthly payments,
    & skip a mortgage payment, plus return our escrow
    I smell a fish & Hubby sees a great! opportunity to save a few bucks so,…
    Where is a site, with simple explanations, that can answer any questions about mortgages.

    (For example: Just how well is Countrywide doing? Do we want to get away from them? Are they about to sell our note to a Mexican bank & we’ll start having to pay in Pesos?)

    So do you know of a site that can answer mortgage questions in an easy to understand way?
    Thank you,
    Harry Gams

  67. Nickolas June 18, 2014 at 8:34 pm Reply

    A recent divorce forces the need to refinance my mortgage. I am considering the FHA streamline refinance loan but I am not sure of all the details. I need to know if I can borrow more then I currently owe on my existing mortgage with this program. I have some other debts that need to be paid off with the equity i have built up in the home.

    I purchased the home in 2009 for $110,000, still owe $107,000 (it was a HUD home and I had instant equity after closing).

    The home is actually worth about $140,000 – $145,000, so in theory; I have about $33,000 – $38,000 in equity.

    So my question is this: Can i borrow the full amount of what the house is actually worth or can i only borrow what I currently owe?

  68. Kareen June 19, 2014 at 6:46 am Reply

    Why if banks have given a second chance to clean up their act and help us on their way, are not even attempting to do so.
    talking about mortgage refinance / adjustment.
    worked twice with my bank CHASE, submitting all required documents several times, because did not wanted to lose my house, could not afford the monthly payment of $1364, only $800 specially after losing my job, but the bank refused this, sadly at the end lost my house as thousands of other American hard working people.
    My question here is:
    Why this so called: Mortgage refinance / adjustment is not government regulated?
    Banks are NOT working with people trying to save their homes!
    to loanmasterone:
    Agree with you on the part that banks that were in trouble should have been allowed to fail as all the rest (well us people that is) It was and still is ridiculous to see how CEO’s get salary bonus, raise and other benefits, for what? Oh yes, forgot, for getting the president bailing them out with our tax money.
    Now, do not agree with your point of “the shoe on the other foot” is NOT like we, honest, hardworking people, trying to save our home and stay above water are taking advantage of anything. Simply trying to work things out with the bank so:
    – we could save our home
    – still pay all interest and mortgage (reduced that is) naturally length of time will increase.
    – save the bank money! Because once the house is gone into foreclosure, property’ s value decrease, especially if the family remains living there and the house is not well kept.
    – If the house is empty and is winter time, well start counting the damages there.

    The point here is, banks got bailed out! how

  69. Lawrence June 22, 2014 at 3:52 pm Reply

    We have lived in our house for 3.5 years and plan to purchase a new home in 1.5-2 years. Our mortgage is 6.25 30 year fixed. We took on a 2nd mortgage about a year ago to pay off debt. Now we want to refinance and roll the two together with our existing car loans and credit card, so we can fix any credit problems, make payments easily, etc. so it will be easier to buy the next house. The new rate being offerred is 6.95%. Our mortgage payments will be $400 more, but we will be saving an additional $400 in monthly payments. We figure our credit will improve greatly. We were worried about paying down a credit card “over 30 years”, but the refinancing co. reasoned that we will only have this “bigger” mortgage payment and interest rate for the next couple of years; it’s the mortgage for the new house we need to be concerned about. (And by doing this, we will improve our credit and chances for a better mortgage next time.)

    Hope that’s enough info. for detailed info on pitfalls of refi.
    Thanks for the replies so far. Here’s more info:

    Mortgage: 180K
    2nd: 30K 15 year fixed at 9%
    Credit cards: 8K at 21%
    Auto loan: 7K at 8%
    Home value: approx. $255K (conservative).
    Mortgage payments + current loans = 2400/month.
    Refi payment would be 2000, incl. closing costs, taxes, insurance, etc.

    We could pay off credit cards by the time we want to move, using bonuses, etc. but right now it is hard to make payments on time.

    P.S. I can’t do the math figuring the percentages over time, etc. I am just awful at it and my head is already spinning!

  70. Britt June 23, 2014 at 12:17 pm Reply

    I am a US homeowner. Instead of refinancing, I wanted to explore the possibility of a reverse mortgage.All I have seen so far is that this is only good for homeowners aged 62 or more. Is there a company that provides reverse mortgages for those younger than 62?

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