Tuesday, December 16, 2008

Santa comes to mortgage holders

You've probably heard this more in the past few days than The Little Drummer Boy: it might be time to buy or refinance, because mortgage interest rates are going D-O-W-N. There are predictions that the rates will go to 4.5%, and lender Dana actually had a rate last Friday below 5%.

For both buyers and re-fi'ers, you'll need to qualify and the loan can't be over $625,000. For re-fi'ers, you'll need equity in your home.

Here are the questions to contemplate if you're contemplating refinancing: First, how much will it cost me to refinance? Many banks and most lenders will charge closing costs. Second question: how much will I save by doing this? Obviously, if you already have a 5.125% 30-year fixed interest rate, you'll definitely want to hold off on refinancing until rates go to 4.5%. However, if you're paying over 6%, it might be worthwhile to start the process now.

I will be attempting to refinance my own mortgage later this week with Bank of America; I'll blog about how it goes.

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