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To refi or not to refi?

January 10th, 2008 at 09:23 am

I hate how finances sometimes feel like gambling. We have an ARM that will increase in November. Right now it's at 5.00%. AS just let me know that rates for a 30-year fixed just dipped below 6%. Should I refi right now? It'll slow down my other debt repayment and I'll take on a bit more debt, because I don't have anything saved for fees.

Will the fees go even lower or start to climb back up? Would it be better to wait, even if it costs me, so I'm better prepared for the added expense? I wish I had a crystal ball...

2 Responses to “To refi or not to refi?”

  1. merch Says:

    I was kind of in the same boat as you. Back in 2005, I was building a house and looking daily at the rate. The rates where just under 6 and then the market turned and rates fell to 5.75%.

    I called my mortgage broker and said what do you have? He siad he had 5.75% with no pints. My reply. Give me 5.5% no points and I don't want closing charges. We said I'll have to go check. Now honestly, I would havve taked the 5.75% with no points.

    5 minutes later, he called me back. 5.5 with no points and if I took out a home equity loan for a month, they would waive my closing costs. I told him my wife and I would sign today.

    My point, just ask for a 5.75 with no points and no refi charges and tell them you'll do it today.

  2. PauletteGoddard Says:

    30 years @ below 6% is awfully good, historically speaking. Some actions people take when deciding whether or not to refi: determining how much interest they'll save; reviewing interest rate history charts for pattern detection. How long would it take for the refi costs to pay for themselves? For me it was 8.4 years, yet I still don't regret refinancing...

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