: Refinancing twice in one year?



nickc50310
01-31-08, 11:17 AM
Hey guys!

I refinanced my house last year to get some money out and pay some debt off and what not.

My rate is currently at 6.5%

My friend who I did my refi with called me last week and said if I refinanced again he could get me down to 5.5%. I am betting with yesterdays cut i could get it down to 5% even.

I dont really need to get any money out of the house. Its basically just to lower my rate.

Good idea? Thoughts?

Also, my credit score is 790.

hueterm
01-31-08, 11:29 AM
You'll need to find out what your closing costs are and compare to the amount of money per month that you'll be saving w/the refi. If you'll be in the house longer than the amount of time it will take you to pay it off, then it would make sense.

Brett
01-31-08, 12:05 PM
yesterdays rate cut will not effect Mortgage rates in the amount that most people think. The Fed cut short term interest rates. Very short term actually, the federal funds rate is available for overnight loans. Mortgage rates are based on long term treasury yields which saw a little downward pressure yesterday and today from the rate cut, but not much.

As I recall you have a fairly small loan amount so a 1 percent drop(6.5 to 5.5) may not make much of a difference. As hueterm says take the amount you are paying in closing costs and divide it by your monthly savings and see how long the break even point is. ALSO if the closing costs are being wrapped into the loan you need to decide if you want to lose that amount of equity to save x amount per month

Brett
01-31-08, 12:10 PM
I didnt write this but it is pretty accurate:

The Federal Open Market Committee (FOMC) is scheduled to meet again this week and it's predicted that rates will be cut again. It's commonly thought that a cut in interest rates by the FOMC brings with it a decline in home mortgage rates. This is not always true.

If you are considering obtaining a new loan, the time to pick up the phone is now.

Historically, the time to make an application to capture the best rate may be before an FOMC meeting, not after. While it's true that mortgage rates may improve immediately following a rate cut, they can just as quickly get worse. I don't want you to lose out by playing the waiting game.

Why do home loan rates often rise following rate cuts by the FOMC? The reason is that Fed rate cuts can be seen as inflationary and bond traders hate inflation. And it is the bond market that sets long-term interest rates.

After two recent FOMC meetings, interest rates rose significantly after a rate cut. First when rates were cut in September of 2007 and then again following the inter-session emergency meeting in January 2008. In each case the price of bonds deteriorated quickly and in the span of two days, interest rates increased up to .75% off of their low points.

urbanski
01-31-08, 12:17 PM
daily watch the rates, being ready to pounce and lock in when they get low enough for you. they vary daily. now's a good time and you cannot guess what way they will go day to day, but in the end you're going to pay 2-4,000 for a refi...money you could use to pay down principle.

Brett
01-31-08, 12:23 PM
last wednesday rates actually changed 4 times in one day all up....anyone who locked between 10 and 12 eastern got a GREAT deal.

nickc50310
01-31-08, 01:22 PM
The move saves me 1080 per year with 2500 in closing costs. I will be in my house for a lot longer than three years. Its perfect for my situation and is the neighborhood I grew up in so I love it.

The only reason i would ever move out of this house is if I got married and had kids. I dont see that happening in under 10 years....

My house is nice yet cheap. I like living here because of the neigborhood and low cost. leaving me to buy other toys. :D

So refinancing twice in a matter of under a year wont mess up my credit or anything?

Brett
01-31-08, 01:37 PM
Sounds like a reasonable deal. Now do yourself a real favor and keep paying the higher payment once the loan refinances and pay it off quicker

urbanski
01-31-08, 01:59 PM
refi to 10 or 15 year

c5 rv
01-31-08, 02:21 PM
I intend to pay off my house and stay in it until retirement. I've refinanced twice to keep the payments the same and lower the term of the loan. If the 15 yr. fixed rate drops to 4.5% with no points, I'll refinance again to a 10 year loan. I have a mortgage broker that watches the rates and calls me.

Brett
01-31-08, 02:25 PM
article for consumption:

http://money.cnn.com/2008/01/31/real_estate/mortgage_rates/index.htm?postversion=2008013110

hueterm
01-31-08, 02:48 PM
A refi like this shouldn't ding your FICO since you're replacing a loan w/a loan.

If you make multiple inquiries, make sure to make them all within (I think, but you should verify) 2 weeks, as mortgage inquiries in that time frame won't count as multiple inquirires. You may not make more than one inquiry, so it may not matter.

nickc50310
01-31-08, 03:25 PM
The broker is a good friend of mine and he gives me the best deal possible. I will only have one inquiry.

Brett
01-31-08, 03:27 PM
your credit will be fine

silver_ws6
01-31-08, 03:34 PM
so basically re financing even a auto loan doesnt hurt credit ? even if i just got the loan 1 -2 months ago ? The dealor gave me 7.9 and my work can give me like 5.9 so its worth it right ?

hueterm
01-31-08, 03:48 PM
I would think that the biggest thing would be to have a 2nd inquiry in such a short time. I wouldn't think it would effect it too much.

Brett
01-31-08, 04:04 PM
so basically re financing even a auto loan doesnt hurt credit ? even if i just got the loan 1 -2 months ago ? The dealor gave me 7.9 and my work can give me like 5.9 so its worth it right ?

definitely worth it. The inquiry thing is overblown. Everyone always hears "dont have too many inquiries" but nobody ever says how many is too many. I can tell you 1 or 2 every month or so will make no difference. I see people with 50-60 pulls per month....that makes a difference.

silver_ws6
01-31-08, 07:45 PM
cool thank you guys !