Ask MetaFilter questions tagged with refinance

Refinance with HARP OK?

morganw — Fri, 11 Dec 2009 18:09:43 -0800

Are there any downsides to a HARP (Home Affordable Refinance Program [pdf]) refinance? My wife & I are employed and not behind on our mortgage, but this seems like an awfully good deal. We bought the house about a year ago to cut our commutes by 2/3 with 15% down, 80% 1st at ~6.625% and a 5% 10 year 2nd at 4.25%. It's our only house and it's the third house we've owned (in 10 years).

Now the originating bank (Wells Fargo) who sold the mortgage to Fannie Mae has called up and is offering 5.375% 30 year fixed which is low enough that we can pay the normal amortization at only 1.4% more than we were paying for a limited-time interest-only feature.

I can afford the small bump and would be relieved to not have a big hike coming in 4 more years when the original loan amount must be paid off in only 25 years. I know how dumb not paying off the principal is, but living on paychecks only with no credit card use or stock options to sell has been surprisingly hard for us.

There are supposedly no fees and no points. Our house is supposedly worth 89% of what we paid for it. The Loan-to-Value is still acceptable in the program, though the banker mentioned they may end up doing an appraisal.

I meet with the banker Monday. I'll be sure to ask who pays for the appraisal if it's needed. Anything else to watch out for?

"Buy a condo," they said. "It's the best investment you can make," they said.

Anonymous — Tue, 01 Dec 2009 17:11:45 -0800

Caught between a potentially troublesome mortgage and a bad job. How should I proceed? I moved across the country, largely to take a certain job. To do that, I had to rent out my condo because it would have been hard to sell in that market. (And would still be hard to sell now.) That condo is under a 5-year ARM (adjustable rate mortgage) that starts adjusting in almost exactly one year.

I went shopping for refinancing, and the condo's status as an "investment property" and the loss of equity is killing me. Only my current lender is able to offer me a reasonable (although not great) deal for a fixed rate mortgage. However, the refinance process will take about three months, and during that time, I have to stay at this job.

The problem is that I hate the job and was planning to move on around now. It's easily the worst job I've ever had. It is bumming me the hell out, and I'm at the end of my rope. I was planning to start looking for contract work for a while, and then get started on my own consulting business. I'd really like to not have to stay or to hop into another full-time job for a while.

So, I guess my options are to stick it out for the refi or to move on and see what happens with the ARM next year. Some lenders have told me that I might be OK with it because interest rates are so low, but can it be reliably predicted that the Fed won't raise them in the next couple of years? A friend of mine in finance says that knowing what happens

I completely missed the non-resident-owner problem with refinancing when I made my decision to move, and I'm hoping I'm not missing anything this time before I make my decision. Please let me know if I am.

Refinance Via a Coupon?

doorsfan — Tue, 01 Dec 2009 11:53:20 -0800

Refinance via junk mail? Just got off the phone with the SO and she tells me we qualified for a refinance saving $140/mo with a lower APR and no closing costs but here's the thing - we got the refinance offer in our junk mail from a small-ish bank, that does have a web site, but doesn't have branches in my state.

We're following up with our bank to see if they can give us a similar deal but it's doubtful there wouldn't be points or other costs associated as with this offer. We actually talked to our bank about 6 months or so ago (maybe longer) and we didn't qualify. Another thing is that I know NOTHING about refinancing. This is our first house - we've been here with our FHA going on 3 years in the spring, paying half our monthly payment every 2 weeks saving us about 15 years off our original 30 (the plan is to stay here).

My question is am I being overly concerned with how this fell into our lap? We don't have the worse credit but have been working on it. My fear is that in some file print if a payment (which we have never missed before) is missed by hours they come and take our house away.

I am being crazy (the Mrs is OK so far with this), or is there someway/something that can be done to ease my palpitations so that we could move forward with this bank? Anyone else refinance with a similar kind of bank/lender and live to tell about it?

Refinance Problem

kim in chicago — Mon, 23 Nov 2009 12:40:53 -0800

How can we deal with Fannie Mae/Freddie Mac's rule that, for new mortgages or refinancing in condo buildings with fewer than ten units, one person may not own two or more units if those units are rented out? In our 8-unit Chicago condo building, Mr. and Mrs. A, who do not live in the building, purchased two units for for the purpose of renting them out. Both units are in Mr. A's name only. The owners of another unit, Mr. and Mrs. B, are trying to refinance their mortgage through Fannie Mae/Freddie Mac. Apparently Fannie Mae/Freddie Mac is now enforcing a rule that, in condo buildings with fewer than ten units, one person cannot own more than one unit if those units are being rented. If Fannie Mae/Freddie Mac agrees to make an exception and let Mr. and Mrs. B refinance, which is unknown at this point, it will cost them an extra $1,000 up front and $200 per month for the life of the mortgage.

An even bigger problem, which will affect all of our owners, is that this new rule will drastically shrink the number of prospective buyers of units in our building. Eighty percent of mortgages are obtained through Fannie Mae and Freddie Mac; therefore, due to the new rule, the vast majority of prospective buyers would be denied a mortgage for a unit in our building. This would obviously make selling more difficult and eventually lower the value of all of our units.

A real estate attorney has advised us that the problem can be easily solved if Mr. A would file a quit claim deed to put one of the units in someone else's name, such as his wife's. Mr. and Mrs. A have resisted our association's efforts to persuade them to file the quit claim, despite the fact that they too will be negatively impacted when they try to sell one of their units. They have agreed to consider it at some point; meanwhile, Mr. and Mrs. B's refinancing has been stalled.

We can't force them to file the quit claim, of course. Any suggestions on other avenues our condo association could pursue?

Are mortgage scams back?

n'muakolo — Wed, 28 Oct 2009 14:31:06 -0800

Is this a mortgage scam? I have an 80-10-10 mortgage (put down 80% in 1 loan with a great interest rate, put down 10% in a 2nd loan with a lousy interest rate to avoid paying PMI, and put down 10% as a down payment). The bank holding the 2 mortgages on my house (Amtrust) has contacted Quicken Loans and given them information about the smaller loan. Apparently Amtrust wants to unload my loans. Amtrust says they will pay off 5% of the principal of my 2nd loan and will pay for an appraisal. If it all works out - i.e. my credit score, income are still good and my house is appraised high enough, the 2 loans will be consolidated into 1 loan at an interest rate such that my monthly payments will be lowered by about $300, without me paying any costs of refinancing. Quicken Loans thinks my property value has gone up quite a bit since I bought. I called Amtrust's mortgage 800# and they say this is legit and they've been doing this for about a year. But they're mortgage companies, so I'm nervous.

So a few questions:
- This sounds to good to be true. Is it a scam?
- If my house is appraised substantially more valuable than when I bought, does the appraisal I do through the refi process automatically make my property taxes go up?
- Anything I should be wary of?
- Why wouldn't Quicken Loans just buy my 2 loans from Amtrust?
- Has anyone heard of this sort of thing?

Refi-filter: Lowering my monthly payments, but paying more in the long run. Is it worth it?

ericbop — Mon, 26 Oct 2009 07:45:18 -0800

I'm eight years into a 30 year mortgage, having paid off about 10% of the total amount of the original loan. Does it make sense to refinance now if I can get a rate that is about 5/8 of a point lower than my current rate? This would shave about $250 off of my monthly payments. But then I'll still be paying for this loan for eight additional years after the original one would have been paid off, right? How do I calculate how much additional $$ I'll owe overall, and how do I decide whether paying more later is worth saving money now?

Citiassist assistance

Sara Anne — Sat, 03 Oct 2009 11:30:53 -0800

In order to pay for graduate school a few years back, I took out two CitiAssist loans to pay for food and rent. A couple of years on, I've consolidated all of my federal loans, but the CitiAssist loans can't be consolidated with federal loans. A couple of years on, I have the kind of paycheck that one gets with a degree in the humanities. I've kept up on the loans, but the interest rate just ballooned again, and soon I will have to start choosing between my student loans and health care. I'd like to refinance the CitiAssist, but I don't know where to start looking, and the Citibank website is incredibly unhelpful (surprise!).
And please, I don't need a lecture about my lack of financial savvy- I know that I've gotten into a mess, I need some guidance about how to start being financially wise.

How flexible are mortgage lenders on second properties?

Anonymous — Thu, 24 Sep 2009 18:09:40 -0800

How flexible is a mortgage lender likely to be on the mortgage for a second home that looks like an investment property? My wife and I live in a home that we purchased in a partnership with my father in law. Since the economy has tanked and taken housing values with it, we are upside down in the loan and would like to negotiate a lower payment until the economy picks back up.

Some details:
The mortgage lists my father in law as the primary owner. This property is the second home he owns but we are supposed to be making the mortgage payments. I was laid off in June and have been working on piecing together enough work to get us back on our feet.

So, how likely is the mortgage lender going to want to help us out in lowering our payments?

Can I shop around for an appraiser when refinancing my home?

jacobsee — Tue, 07 Jul 2009 12:27:46 -0800

When refinancing my home, can I transfer my appraisal between lenders, or must I pay for a new appraisal with every lender as I'm shopping around for the best deal? I've been told by an appraiser and a lender to not buy an appraisal up front because as of May 1, the lender is now required to go through a govt agency that selects an appraiser.

In order to lock in a rate, I'm being asked to pay for an appraisal, but doesn't this prevent me from shopping around because once I pay for an appraisal that is presumably non-transferable, I will tend to just go with that first lender.

Or is the assumption that I won't lock in a rate until I've decided to go with that lender?

Am I missing something?

Math is fun. Mortgage refinance question!

Anonymous — Wed, 24 Jun 2009 18:28:48 -0800

Generally good with numbers; but mortgage refinance has my head spinning. I'm looking to refinance my 30-year mortgage to a 15-year. The more I calculate, the more confused I get. What is my best option?

Personal details: I'm unmarried, income $45,000 pretax, credit score 782.

Mortgage details: Bought a house 12/2007 for $173,000. 30-year mortgage at 5.875%, 20% down at closing. House currently valued at $173,500.

Financial details: I have approx $16,000 available in savings (which I won't be touching), but I have a CD that matures in July for $25,000 which I will be using to pay down the principal. I can swing paying around $1600/month toward the mortgage.

Monthly payment (principal/interest/escrow) is $1050. I've been able to add $500 additional principal per month, every month since the start of the loan, so my current principal balance is about $128,000.

Should I:

1. Keep on keepin' on at 5.875% for 30 years, apply a one-time $25,000 to the principal, and $500 extra per month; or

2. Refinance $128,000 at the best rate I can find (I locked in Wells Fargo at 4.875% with one point while I continue to shop around), pay the $3000 (I guesstimate) toward closing costs, and THEN pay down the principal by $25,000, continuing to add additional principal per month (up to a $1600/month payment); or

3. Pay down the principal by $25,000 FIRST, then do all of the above in option 2; or

4. another option I may not have even considered?

My wallet thanks you in advance. Posted anonymously simply to protect financial specifics.

Why doesn't Provident Lending want my business?

genug — Tue, 09 Jun 2009 13:35:30 -0800

I am in the process of refinancing the mortgage on my home. My lender wants to blow up the deal at the last minute. 1) Why? 2) What are my options? Went all the way through the process. Signed closing papers on Friday. 30-day lock expires today. Lender informed us today that one of the (many, many, many) signed pages of paperwork has an extra penstroke on the date line. My hand got tired from all the signing and it slipped, put an extra stroke on one of the numbers (for the date). They are asserting that this looks like the date has been crossed out and changed, and thus voids the close.

Question #1: why are they doing this? Rates have gone up in the last month, so breaking the deal is going to cost me money, but what is in it for them? Obviously I won't be going back to the same firm if this process has to start again.

Question #2: do I have any recourse? I have no idea how mortgages work, of course, but in the abstract it seems like there might be some protection from bad lenders, or at least some regulators with an interest in knowing about bad business behavior.

The company is Provident Lending, for whatever that is worth.

How to get a cash-out refinance on a newly purchased property?

walla — Fri, 22 May 2009 19:44:58 -0800

Stupid-mortgage-company-filter. Is it possible to get a cash-out refinance on an investment property without going through the 6-12 month seasoning process? We're scheduled to close on a property this Tuesday. The mortgage fell through at the last minute because of a combination of crazy new lender rules and bureaucratic incompetence. Luckily, we can pay cash, but we need to replace that cash immediately to rehab the house. Immediately = within a few weeks. Every lender and broker I've spoken to says that everyone is now following Fannie Mae's guidelines, which require 6 months of seasoning (being on title) for a primary residence and 12 months of seasoning for an investment property. Some lenders say "it's possible that some lenders won't have to follow the Fannie guidelines" and can give us a refi faster. I have called a bunch of lenders and these remain mythical so far.

What kind of lenders might be in a position to give no-seasoning loans? We are willing to pay a somewhat higher interest rate because the loan is not huge.

We're also open to creative alternative suggestions for financing the rehab. Incidentally, the seller is being completely intransigent and postponing the closing date is not an option, but it's a great deal and we want the house. Thanks for any help!!!!

Getting the PMI runaround?

nevercalm — Fri, 08 May 2009 08:36:19 -0800

Is anyone else getting the runaround on refinancing via the Making Home Affordable Act because you have PMI? Details inside. We're trying to refinance under the new Making Home Affordable act. Because we are still very new homeowners and have PMI, we're being told by our primary lender (GMAC) that "the logistics are still being worked out, and they're negotiating details with the PMI providers."

We called Fannie Mae, who owns the loan, and were told that "there is a software issue that is not allowing PMI loans to be entered into the system."

The dig is that we had first called Chase to refinance, and the agent there told us that he had put in several loans with PMI.

Of course, as all this is happening, the rates are going up. It is obviously in the best interest of the lenders to have a higher-rate refi, so this really feels like the runaround.

Is anyone else having issues like this? I'm ready to call my congressman and/or network news people.

Should my refinance warrant such a long delay?

Anonymous — Wed, 06 May 2009 11:22:05 -0800

Should my refinance warrant such a long delay? My current mortgage servicer is working with a local mortgage lender to help me refinance my 7 year ARM which resets in 2 years. They offer $5000 in closing costs. A good deal by any measure as I will go from my current 5.62 to about a 4.88 rate or maybe less these days at no cost. Nice.

And I want to add $30000 to get solar panels and participate in tax credits returning 80% of that. Nice.

So, I applied for this in late January, and it still hasn't finished. This mortgage specialist has strung me along with 'just a little longer' for this time, and explained that Fannie Mae was wanting to double check these in case we would not be able to do this refinance without the incentive from the servicer. That was March.

Credit-wise, we are in the superior range, savings-wise, we are average (meaning we have very little), but income-wise, we do okay with steady work and have $75,000 in equity in the house. There's some student loan and credit card in there, but also some retirement and investments that balance reasonably. We're not talking mega-mortgage here, just $178,000 including the extra $30,000, for a roughly $225,000 house. Seems not-too-risky to me. I'd be willing to cut the panel project to get this taken care of, but the dude hasn't indicated that this would help.

Does this make sense? I feel bullshitted, but I don't want to walk away from the free closing costs. I see no reason for him to waste either of our time. I know of other refinances that took two weeks.

What is the starting process for refinancing a home?

davebug — Fri, 03 Apr 2009 14:21:00 -0800

I've decided it makes sense to refinance my mortgage. I'm going to call the mortgage broker I used for my initial mortgage. a) Where else should I call (and how do I find them?) b) What questions do I need to make sure I ask of everyone? I know the common stuff, fixed interest, no points, probably going 30-year, but may see if I can afford 15-year.

This is not the time for finger pointing, Steve.

thanotopsis — Wed, 01 Apr 2009 16:10:23 -0800

I'm in a bit of a bind. Through a set of rather bad situations, I'm soon going to be behind on my home loan, and there's not much that I can do about it with my current lender. I got an intriguing mailer yesterday, and spoke with the operator that answered the phone. They're trying to sell me on loan restructuring, not refinancing. My lender raised my rate to 8% 2 months ago. Add to that the fact that we haven't been able to afford our raised property taxes (now at 24.00 per 1000 in our area...up from 15 when we moved here originally), and the county decided to contact our lender to get it added to the loan by force, and we're going to see an increase in our monthly payment by nearly 50% starting next month. That's more than one of my paychecks.

Our lender is actually bankrupt, and our loan is being held by a company called "Loan Services". They maintain that they're managing the loan at the terms specified by the original contract, and that there's nothing they can do to change it. They won't offer me a refinance. Because of our wilting financials, my credit rating has dropped precipitously, and trying to work through a mortgage broker to find another lender has been fruitless. After a month's work, he threw up his hands and said we'd be better off just trying to weather the storm.

I have 4 kids to feed. I can't weather the storm.

This outfit mailed me yesterday with an offer to restructure the loan. What they offered to do was act as my attorney, and nail the lender to the wall with "predatory lending law violations" as a negotiating tool. With that kind of ammunition in hand, they could negotiate a lower rate on my existing loan for me. The only catch is their fee: About 3 grand.

Suspicious guy that I am, I figured they couldn't be the only one doing this, and there was something in the back of my mind that said that, with enough elbow grease, I may be able to do something about this myself.

Is this just a scam, or is this a legit opportunity to get some relief -- and if it's legit, is it something I could either do myself, or get done for me at a much lower price tag? I personally can't afford the fee that they're asking, particularly if it means they're only going to lower my payment a few hundred dollars a month.

What's bad about FHA loans?

RobotNinja — Mon, 23 Mar 2009 07:45:31 -0800

Should I take this FHA refinance, or wait for the new mortgage plan to take effect? Update to a previous AskMe. I bought a house in 2007 around the peak of interest rates, and am looking to refinance now that rates are low. Like a lot of other people, I'm having problems getting a conventional loan since decreased home values have led to an increase in my loan-to-value ratio. However, my mortgage broker tells me I can get an FHA loan and has written up an estimate. My current mortgage seems to be backed by FreddieMac, so I ought to qualify for the new mortgage assistance refinance plan, but my lender doesn't have guidelines set up for the program yet.

Currently I don't pay any mortgage insurance because I have a 2nd mortgage which brought my primary loan below an 80% L-V ratio. Under the FHA loan, I will have to pay mortgage insurance, but my monthly payment will still be lower than it is currently. My understanding of the new mortgage plan is that I would still have to pay some sort of insurance, but I might save a little bit at closing because appraisals may or may not be required - my lender requires 2 independent appraisals for high value FHA loans. So should I take the loan at 5%, or wait for the new mortgage plan? What is the down side to an FHA?

Refinance a mortgage mid-term in Canada?

hylaride — Wed, 04 Feb 2009 05:22:36 -0800

What are the costs of refinancing your mortgage mid-term in Canada? I'm about half-way through a 5 year mortgage. I'm in a closed term 5 year fixed rate mortgage at 5.84%. The financial crisis has pushed variable rate mortgages down to to as low as 3.5%, though fixed rates for 5 year terms are not much lower than mine. Going variable could save me $4-5000/year.

Still, I'm interested in refinancing anyways. Other than the discharge fee of $200 at my company (that a new mortgage company will often pay for), what are the costs of switching mid-term in Ontario, Canada?

Income Changes During Refinancing Process

Anonymous — Sun, 01 Feb 2009 06:18:23 -0800

I applied to refinance our house at the end of December. I've supplied all sorts of income information, but in January a decision was made that starting in February both my wife and I (we work in the same office) will be reduced to 70% hours and salary for a limited time. What do I need to do relative to the mortgage in process? I have no way do know if they have done a verification of income yet, but don't believe they have. The arrangement with the office is that our reduced time and salary is for a three month time period (February through April). After that, in theory, we go back to full time. The reality is that we go back to full time if our practice finds more work. Otherwise there will be layoffs, which may or may not affect us. As I work in a fairly public profession, that is why I've submitted this anonymously.

The closest I found to this question is: http://ask.metafilter.com/35442/Should-I-tell-my-mortgage-broker-I-just-lost-my-job and the responses didn't impress me, as well as seeming out of date for the current environment.

We have completed appraisal and I've been told that the mortgage office has sent information to the closing agent, and a date should be scheduled soon. I may need an extension as the closing might be more than 45 days past my rate lock. I don't want to throw a monkey wrench into the already delicate works. On the other hand by *our* calculations, even at the reduced salary we should be okay (less than 28% of income going to mortgage and taxes).

I don't have a terribly close relationship with the mortgage officer, so could use some advice on what we are expected to do here. I certainly don't want to just let it ride if it could be construed as fraud. On the other hand, what we provided has been completely accurate to date, but we now know about new circumstances. If there is some form at closing that requires me to certify that the income information I provided is currently accurate I won't sign it.

All being processed in Vermont, if any know of state level variations on the rules about this.

Bottom line, am I better off calling the broker with this information or hoping we can close quickly and move on with life? Is there anyone else to check with that wouldn't potentially jeopardize my application?

Money question. I need $82,500 within 30 days. Home equity line/loan or refinance or .... something else?

Dave. — Mon, 26 Jan 2009 17:52:51 -0800

Money question. I need $82,500 within 30 days. Home equity line/loan or refinance or .... something else? Background ... this is a charitable situation. My (very low income) 74 year old mother-in-law lost her house in a divorce settlement last week. She cannot qualify or afford to purchase a place to live. Rentals in her price range are (very) undesirable. I have been compelled to purchase a home that mother-in-law can then rent from me. I found a place over the weekend, offered on it, and it was accepted. I now need to have $82,500 cash to close it in 30 days or I will lose it.

For reasons I won't go into here, I very much do not want to traditionally mortgage this house ... that would require ~25% upfront money. So, my options, as I see it, are to draw a home equity line/loan or to refinance my house. Problem: refinancing volume is causing delays that may exceed my 30 day timeline. However, I've been told that I can draw a home equity line/loan within 7 to 10 days. This seems very wise to me, because I can draw that and then quickly do a refinance to satisfy the home equity line/loan.

I know that I am very qualified to get a loan or refinance; no problems with that. But my concerns are as follows: (1) I've been told by 2 different bank people that it is very common to pay off a home equity line by refinancing. Are they telling me the truth? ... and (2) I'm wondering if there might be some mysterious other way to get ahold of $82,500 temporarily. Taking into account the 30 day timeline, would you draw a home equity line/loan or do something else? Thanks!

Info sources for refi rates

msalt — Sat, 17 Jan 2009 12:56:46 -0800

What are the best ways to find and compare mortgage refi rates and fees? (web sites, or?) Rates are low, my credit score is very high, and I'm planning to stay here indefinitely (at least 5 years), but I don't want to pay a mortgage broker. Google is pretty worthless -- their pick hits are commercial sites of dubious credibility or value. EG bankrate.com lists only 1 mortgage source in Portland OR, which is ridiculous.

Looking for a 30 yr fixed with no prepayment penalty for about half the property's value, just lowest fees and rate. Contacted my existing mortgage lender (the notorious Countrywide, who bought my mortgage) but their fees seemed high -- $3300 plus 1.75 points ($4500) to get a 5% loan, plus another $1836 for some vague "prepaid" fee.

Which Refinance Offer to Take?

wintermute2_0 — Thu, 08 Jan 2009 18:43:22 -0800

RefiFilter. I have a couple options for refinancing my mortgage and I'm trying to figure out the best option. More inside. Back in the halcyon days of 2004, I refinanced my mortgage with a 5-year ARM at 4.75%. I now owe about 122K on that mortgage. I make monthly payments of $928, including taxes.

A couple years later, I took out a home equity loan through my credit union to make some improvements and consolidate some debt. It's a 10-year loan at 6.35%. I make monthly payments of $327. The balance stands at $23K.

I need to refinance at least the ARM. My credit union is offering a 30-year at 4.875. The closing costs are about $3k ($2k with a discount my credit union is currently offering).

Countrywide, which currently has my ARM, is offering to refinance both loans at 4.875%. This would lower my monthly payments by about $200. I would lose a little equity in the process. Closing costs are also about $3K.

Which option makes more sense? Lower payments sound nice but I think I can pay off the second mortgage in a few years considering I just got a promotion. I'm planning on staying in my condo for the foreseeable future (it's worth about $190k). My credit score is about 770.

I appreciate any advice you can offer.

Need help with Interest-Only Mortgage and the Benefits (if any) of Paying Principal in this Housing Market...

seinfeld — Wed, 31 Dec 2008 13:49:19 -0800

Is paying principal on an Interest-Only (I/O) mortgage a smart idea when housing prices are not appreciating and there's a strong likelihood that: a) I'll put this home up for sale before my adjustable I/O mortgage adjusts, and b) Our home won't significantly appreciate or depreciate by the time we try and sell.

Help Me Understand My Mortgage Re-fi Options

terrier319 — Thu, 04 Dec 2008 17:33:57 -0800

We're refinancing our home mortgage and want to know if you think we should jump now or wait, considering recent news about mortgage rates dropping further based on supposed guarantees by Freddie and Fannie. This is a jumbo loan ($600K+) ... the current rate we are quoted is 5.5% for a 5-year adjustable, interest-only loan -- down from 6 and an eighth just a few weeks ago. There are no penalties if we decide to re-fi again in the months ahead, but we obviously want to lock in at the best rate now. There were some headlines over the last couple of days about rates dropping to 4.5% or even lower. This is all mystifying to me because I'm not a numbers guy and I have no idea how to read the market. I concentrate on my monthly hit at that's all. Pull the trigger now or wait?

Is a lower interest rate worth the closing costs?

MtDewd — Wed, 26 Nov 2008 11:28:58 -0800

Interest rates are down, so my mortgage broker contacted me to see if I want to refinance. I'm under the impression that every time you refinance, you lose value in the house, so is this a good idea? I'm only 16 months into a mortgage @6.75%(fixed, 30-year) and am being told I could get one @ 5.625%(also fixed, 30-year), saving $150/month. Closing costs are around $3000. This sounds good over the long run, but is it really?

What's the money angle? Who is making money here, and who isn't?

Bonus question: my wife thought if we were refinancing anyway, why not get another $10K to fix up the bathroom (and only saving $100/month). Is this a worse idea?