Question by lilly101200: Should I refinance to get a lower payment?
I have a mortgage of $ 170,000 at 5.9% interest and was going to pay it down by $ 20,000 but am wondering if it would be better to refinance now or wait until the rate goes down even further.
Best answer:
Answer by golferwhoworks
pay it down and yes then refi or you can wait it out either way
What do you think? Answer below!
Rates will probably not drop any further – the Fed is basically at 0%, so they can’t drop the overnight/bank rates any further, which means the prime will not come down much further either.
At 5.9%, you may not be able to lower your interest rate by a full point (30 year fixed were averaging 5.17% today per bankrate.com) and depending on how long you were going to stay in the house, you may not be able to pay back the costs with the lower rate (also figure in any extra interest charges to be paid if you are extending the loan back out to 30 years and planning on staying in the house).
Refinance *only* if you plan to own the house long enough to break even with the fees the refinancing will cost you.