Mortgage refinance

[Husker Runner]

Hey, I know usually we post fun stuff around here...but just thought I would encourage you to explore refinancing your mortgage if you haven't checked it out in the past few days. I just locked at a 4.75% 30 year fixed rate with a credit against the closing costs that covered all of the lender fees plus a few hundred dollars of the third party fees like the title policy.

 

Rates are now around a 37 year low. You might be able reduce your monthly mortgage payment significantly.

[NU fan in Denver]

Hey, I know usually we post fun stuff around here...but just thought I would encourage you to explore refinancing your mortgage if you haven't checked it out in the past few days. I just locked at a 4.75% 30 year fixed rate with a credit against the closing costs that covered all of the lender fees plus a few hundred dollars of the third party fees like the title policy.

 

Rates are now around a 37 year low. You might be able reduce your monthly mortgage payment significantly.

 

The word I am getting from a mortgage company is wait until Jan 20 (Obama's turn). Rates will fall to 4.5%.

[Husker Runner]

That is very possible, but predicting interest rates is very, very difficult. I know two mortgage brokers who both locked a refinance rate for their own homes in the past couple of days. (I did not use either of them for my refi though, their fees were too high.) So not everyone thinks rates are going lower. If someone knew for sure where interest rates were going they could make a killing in the market far beyond saving a little bit on a house payment. The spreads between treasuries and mortgage rates are higher than their historical norms so that would usually be an indicator of rates going lower, but a lot of competition has been taken out of the market in the past year with so many mortgage company failures and the companies left are all running tight staff levels so if they get inundated (as they are now) they will be reluctant to lower rates further since they're already getting all the business they can handle. Plus the Feds are running out of tricks.

 

My suggestion would be to try to find a rate with negative points that will cover most (or all) of the closing costs so if rates head even lower you can refi again without worrying about it. You might pay an extra 1/8 or 1/4 point on the rate but you'll have little or no out-of-pocket expenses and most people will still be able to lower their rate from what they are paying now. That way you can still lock in a better rate in case we are seeing a bottom now.

[Husker Runner]

Quite a jump this morning, the lender I locked with yesterday is now 0.25 higher...could partially be due to their loan volume, they are now only doing 45 day locks since they are concerned with getting everything processed in 30 days, and it doesn't look like wholesale rates have changed significantly. If you are interested in refinancing it would pay to keep an eye on rates and be ready to move if you see a rate that works for you, they sometimes get repriced multiple times a day depending on the market.