Posted: 12/24/2008 2:49:34 PM EDT
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My GF has to refi her home in the next 4 years (divorce situation) and wants to know if now would be a good time to do so?
I think she would be able to get a refi easily as she is only refinancing 20% of the value of the place (so she tells me - or in her words 1/5) - I am guessing that we're talking about a loan of just at or below 100K. Given the situation with the latest rate cut, etc... she is wondering if it's a good time to do the refi. I know there are a few mortgage people here that might have some suggestions, and I'm hoping one of you can answer this for me. Thanks! |
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Rates will likely hit their low in the next month or two. Not sure where they'll be in a year, but if you pay enough points (1.0-1.5%) it has been fairly easy to get your rate in the 4.75% range in the past week or so. That is some pretty cheap money.
I'd say don't try to time the bottom, as you will most likely miss it. Be happy with a VERY reasonably low rate, and bolt. One more hint, if she plans to be in the house less than 5 years, don't pay the points. If she plans to live there forever, pay points and buy that rate down. Usually a max of 2% is what I'd suggest. Andy the banker. |
I passed on 4.875 with no points last week. 4.75 is my target.
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Our loan officer just missed getting us 4.5% with one point last week. It was already to 4.75% with one point or 4.625 with 1.5 pt. by the time they got back with us. Rates have edged up but are expected to lower a bit in the near term.
ETA: Not a banker or mortgage person, just a shopping home owner. |
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I listen to what I believe to be two reliable financial radio programs, and both say:
- Refi now, because - You don't know when the market will bottom out, and you don't want to miss the rates that are being offered currently, and - Rates really can't any lower than they are now because the return won't beat inflation, something lenders try to avoid (If their return is only as good as inflation, they really haven't made any money) |
