Question by Hickdawg: With the emergency rate cuts by the Fed yesterday, should I refinance my mortgage? I have a 30 year at 6.125%
I bought in Oct 2006 with 20% down for a $ 250K house. Got a 30 year mortgage at 6.125%. With the emergency fed rate cut yesterday, is now a good time to refinance or do you think it will go down more? How much cash do you need to refinance? Thanks!
Best answer:
Answer by DirectLendingPlanet
you should have little to no costs to refinance you should be able to roll the fees into the loan but look for someon that will do the loan with minimal fees and still get you the best rate
I would look to see how much you could save doing a refinance your rate would fall about 3/4% or more of a aprox. your fees could be very low because its a refinance.see if theis calculator will help. assuming you have 680+ credit you could get a gret rate. the fees will be the determining factor here i think. if you can cut 3/4 a percent or more and are not going to refinance within the next 3 years id say yes it may be a good time! I dont think we are going to see any more huge cuts. so jumping on this opertunity may be a good idea. see what the calculator says you would save and contact someone to see if they agree! i would not let a lender pull your credit you should have agood idea what your score is and just tell them!
asuming you can get a rate of 5.30 or better you sould save about $ 36,900.00 over the lofe of your loan and should cut your payment about 160.00 monthly
if you applied the extra 160 to the new mortgage it would save youa an additional 69,649.00 in interest and you would pay off the mortgage 6 yrs and 2 months early!
total interest saved $ 106,549.00
Know better? Leave your own answer in the comments!
You don’t need any cash to refinance. Usually you can roll all the expenses into the new loan. Whether you should refinance depends on several things. The Fed rate cut may not creep into mortgage loans for a while.
You may find it favorable to refinance if you can get a loan for 5.5 percent or less with no points. Although yo have paid off about $ 3,000 in principal, by the time you calculate the refinancing cost you will still end up with about a $ 200,000 new loan and at 5.5% your monthly payments would be about $ 80 lower. It seems you would have to go to at least 5% to have a meaningful reduction in payments of about $ 140.
Yes, it could be a great time to refinance. Your rate will definately be lower than the 6.125%, that’s a given. But determining exactly what rate is tough w/o knowing the other details, such as credit score and the like. But a 680 will do the trick on the lowest rate possible.
My other question would be, since you bought in OCT of ’06, what’s actually left of the 20% you put down? That’s meant to say: How much has your home depreciated, if it has.
So, suffice it to say, you can throw all kinds of numbers around, but if you’re truly interested, give someone a call, and make sure your fees aren’t killing the reason you wanted to refinance in the first place!
Have a great day, and good luck!