Is a Cash-In Refinance a Good Idea? NASDAQ
Does it make sense to pay down your mortgage in order to be able to refinance at today's super-low rates? Is this a good strategy for homeowners who are underwater on their mortgages?
A lot of homeowners seem to think so. According to Freddie Mac, over one-quarter of all mortgages refinanced in the second quarter of 2011 were "cash-in" refinances, where borrowers paid down a significant part of their mortgage balance as part of the transaction.
At first glance, a cash-in refinance is a fairly straightforward solution for borrowers who'd like to refinance, but can't because declining property values have left them owing more on their mortgage than their property is worth. But it tends to be expensive. To get back into positive equity, underwater homeowners may have to write a check for several tens of thousands of dollars, if not more.
Generally, you don't want to do a cash-in refinance unless you're certain it's the best use of your money. Here's some of the main things to consider when deciding whether a cash-in refinance makes sense for you.
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Home Refinance Rates Today
The source for today's refinancing information. homerefinanceratestoday.com
My mortgage is paid in 5 yrs. How do I refinance at today's low rates in a 5-year term mortgage?
I would end up paying more when the term is longer (10-15 years) even though the rates are 2% higher and I would continue current payment plan.
since the fed cut rates again today how long will it take to get to the bank?
for example. i want to refinance my mortgage. of course i want the best rate possible. since the fed cut the rates again today how long should i wait before i can go and apply for a refinance??? my husband is trying to tell me it takes about 2 weeks. but that seems like a long time to me. i would think maybe 2 days. does any one know this????
When the fed cuts rates it cuts the Federal Fund Rate not the mortgage lending rate. It does have an indirect affect but the rate cut affects the short term borrowing between banks.
Although mortgage rates should drop this is based on the 10 year bond.
WARNING: Dropping rates requires a significant increase in the money supply. Any increase in the supply of money is inflationary. Fixed rate mortgages are priced on the inflation rate and risk level, not the short term rate. An increase in the money supply could and eventually must increase mortgage rates. As inflation expectations start taking hold of the economy, mortgage rates will increase to compensate. It is very possible to see lending contract rather than expand in this scenario.
Home owners: with mortgage rates at 2yr lows today, have you thought about refinancing?
If not, what's holding you back? Hope for lower rates, lack of equity, market or employment fears, or is it something else?
Interest rates are pretty great right now, but my 30-year fixed is still lower than anything I can get without paying a ton of points up front.
Rates are going to have to come down another 1/2 a percent or so before I'd even consider it.
Remember Buddha's advice:
"Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense." You are the only "expert" you can trust: All brokers, and every other loan officer guru giving advice here with a .com or contact me at the end is "selling" you something (its not advice, its advertising). Don't buy "it."
recieved good faith estimates for a mortgage refinance today. Should I wait a couple of wks for lower % rate?
the rates havent moved much since the fed cutting short term rates. if you have an estimate and its a good one id say go for it. If your waiting for lower rates from the lenders your not going to see it in the next few weeks
Waiting for lower rates can pay off or be the wrong move and no one really knows for sure.
Noone can predict the future for you. There are knowledgeable people on both sides fo the debate...up or down.
Are you happy with the rate quoted and the costs associated with it?
If you are curious if there is a better deal out there for you then, by all means, get a second opinion. It shouldn't cost anything for you to go through the same process. Don't pay application fees, they are junk fee #1.
You should be able to fax your GFE to any mortgage broker. If you provide a copy of your credit report/scores, you should be able to get a GFE you can compare to.
You can wait to lock your loan but it's a roll of the dice. Your advisor should be in close contact with you when rates move and in which direction.
Good Luck
http://www.lendadvisors.com
It almost sounds like you don't trust your broker or LO: if that's the case, it's not too late to back out! If all you have is a GFE you are not legally bound to anything right now.
If you DO trust your broker, simply ask them. If you wait a couple of weeks, you MIGHT get a better rate, but the program that you qualify for may go away and you won't qualify for anything! Again, no one knows for sure but your broker. You really need to meet with them and discuss your concerns.
Remember: your broker or Loan Officer works for YOU! If you have questions or concerns, they need to listed and give you solid answers that you understand! Good luck! :)
Is it worth it to refinance my 30 yr fix?
I am a little over 5 years into a 30 yr fix @ 5.25%
This was the lowest rate on a 30yf until today. Rates are going under 5%...but is it worth it since I have a great low rate right now? I hear it isn't worth it until at least 2 % lower from given rate? So, I shouldn't refinance unless Mortgage rates fall to 3.25%?
Instead of a refinance use that money to pay down principal. Here is a great example.
Say your mortgage is 100,000 at 5.25% pay an extra $300 per month in principal reduction payment, the mortgage repayment is shortened by12 years and 9 months and your total savings will be $40,588.00.
Think of how great it will be having your home as your nest egg (free and clear) and an extra $40,588 in savings that you did not give to the banks.
So find out your closing costs, how much your payments will go down (remember if you take out a new 30 year loan instead of just the 25 years you have left to take into account the total cost of both loans), and how long you plan to remain in your house and then figure out if you'll come out ahead long term.
Interest rates have gone back up a little today. Do you expect them to contiue going back up or go back down?
Interest rates have gone back up a little today. Do you expect them to contiue going back up or go back down? I am considering refinancing, but don't know if I should wait a little longer... or if the rates are on their way back up.
What does the Fed's three-quarter point cut today mean for mortgage refinances?
I got a jumbo loan in October 2007 at 6.125% (I'm in the SF Bay Area). Since the Fed rate has been cute by 2 points since then, and I understand that as of June my loan will become a conforming loan, what kind of refinancing rate could I reasonably expect to obtain this summer? By "reasonable," I mean nothing shady, just run of the mill Bank of America or Wells Fargo type solid deals.
Thanks!
Honestly there is no way to know. I manage at the national headquarters of Midwest's largest privately held mortgage bank and we have no idea what is going to happen with rates. While you are correct that you will soon have a conforming loan, we are anticipating a tiered rate structure amongst the major end investors. I would not be surprised to see a new subset of rates that falls between conforming and jumbo. 6.125% is not a horrible rate in this market for a fixed, jumbo product.
If you have further questions feel free to email me, unlike most people who answer questions on here I actually know what I'm talking about and have the credentials to back it up.
Edit: I just recieved this email from an answerer that I will not name
"unlike most people who answer questions on here I actually know what I'm talking about and have the credentials to back it up."
Granted there are a bunch of idiots and kids but pardon me for stepping on your holy feet YOU ain't the only one with credentials that far out weight yours.
_______________________________________________
It's ok to disagree with me, but if you are going to do so please at least use proper english! Ain't and out weight...HA!
The fed's have cut rates alot lately but the banks/lenders are hedging their bets that they can make up their losses with not giving better rates to consumers. This is not what the Fed wanted to see.
It takes awhile for these rate cuts to filter down as well, so just hang on. We're all praying for rain sort of speak!
The Fed's 3/4 point rate was on overnight loans from the Federal Reserve Bank to the local banks.
The local banks can still charge whatever they can get away with.
Drop interest rates to 3.5% for everyone. Refinance forclosures at todays market price. Why not!?
Many refi's will not happen at today's rates, forclosures can refi at the low rate and use todays market value on their homes. This will keep them in the home and free up billions of dollars. What is a forclosure worth after repossion and shelved for the next 3 to 5 years.
And all the banks go bankrupt. And we taxpayers will have to give them even more money so that they can stay solvent.
how can i take advantage of the low mortgage rates ?Bought ahouse last year and have a fixed rate?
I bought my house last year and ahve a fixed rate but now want to take advantage of the low rates prevailing today.My credit is not that good and refinancing could be a problem because of that
Should I refinance now or wait?
I bought my house about 2.5 years ago and am wondering if I should refinance now to lock in today’s low rates or just wait it out. The house is worth about 850K. My first mortgage is a 600K 7 year ARM at 5.85% (4.5 years left). My second mortgage is about 70K at 7.8% which I plan on paying off before the ARM resets. Now that I have 20% equity in my house my lender can wrap both loans into a 6.25% 30 year loan with about 3-4K closing costs. I have no idea of how long we will be in the house but have no plans of moving any time soon. I am just worried that in 4.5 years when the ARM adjusts refinancing rates are going to be much higher. Do you think rates will get better towards the end of the year if the economy starts to get better? Your thoughts would be great.
Thanks for all your help guys. Just had the appraisal and it fell just at 850K (100K more than I bought it for 2.5 years ago after kitchen and bathroom remodels). I realize that the conforming loan limits have been modifed but loans above 417K are still considered higher risk and have about 0.5-0.75% higher rate than conforming loans. Better but not quite equal.
I would refinance now and consolidate the 2 mortgages into one. My friend could actually match the rate you have on the 1st mortgage right now and put you into a 30 year fix. I doubt that you will be able to do that when your note turns into an adjustable. That is a problem many people are experiencing and why so many face foreclosure. Also, now you would only be paying interest on one loan instead of 2 and your payments should go down. If you wanted you could apply the savings to your home mortgage and pay it off sooner then expected. With the new stimulus package that came out your loan will not be looked at as a jumbo loan until Dec 31st.
You should shoot my friend an email, he’s the best out there and licensed in our states.
mike@afbankloans.com
Good Luck!
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