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Mortgage rates headed down - time to refi?
Old 01-22-2008, 12:24 PM   #1
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Mortgage rates headed down - time to refi?

Anyone else thinking of re-financing the mortgage at the new low rates this morning? I'm seeing some 5.30 APRs on bankrate.com for 30yr fixed w/ 0 points.
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Old 01-22-2008, 12:29 PM   #2
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I'm definitely thinking about it. I'm thinking of a fixed 15 year with no points, though. They're getting down near south of 5.00. I'm going to wait another few weeks, though, and see what happens. I'm sitting on a 5.75 30-year fixed at the moment, so I'm not in a huge rush to jump into it. Plus, some of the bankrate groups they have listed seem a little on the sketchy side.
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Old 01-22-2008, 12:34 PM   #3
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If 30-yr fixed rates drop below 4.5%, I'll refi. Otherwise, no.
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Old 01-22-2008, 12:52 PM   #4
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I recently relocated and have only been in my house a year. I've got a 30 year at 6% right now. I paid one point for that rate a year ago.
I've been thinking of trying to refinance to a 15 or 20 year mortgage. Hopefully the rates will get a little lower. I've got about 15 years until retirement.
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Old 01-22-2008, 12:54 PM   #5
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Wells Fargo is below 5% for a 15-year fixed.

And this 5/5 looks interesting from PenFed at 4.875%:

https://www.penfed.org/productsAndRa...tgageLoans.asp
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Old 01-22-2008, 01:07 PM   #6
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Wow. Thanks for the info, twaddle.

I'm curious, and I mean this without any facetiousness, why would you want an ARM? Is there a benefit to having one other than a scenario where you plan to have your place paid off in five years? I've never trusted ARMs, but am curious if others have used them successfully, and if so, how.

Thanks in advance.

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Wells Fargo is below 5% for a 15-year fixed.

And this 5/5 looks interesting from PenFed at 4.875%:

https://www.penfed.org/productsAndRa...tgageLoans.asp
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Old 01-22-2008, 01:13 PM   #7
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I'm curious, and I mean this without any facetiousness, why would you want an ARM?
Discussion about it here:

PenFed 5 Year Fixed Rate Mortgage

Basically, the terms are very attractive, even the rate reset terms.

Of course, some people may be better off with a longer-term fixed rate.
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Old 01-22-2008, 01:16 PM   #8
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I think it depends on whether you forsee inflation or deflation coming up. It seems the 'talking heads' are solidly in both camps........
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Old 01-22-2008, 01:51 PM   #9
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I was playing around with the calculators at dinkytown.net, it seems like a good deal to refinance. Now the question is how low could the rates go?

I'll stick with a fixed rate loan since I may end up retiring in this house.
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Old 01-22-2008, 01:58 PM   #10
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Now the question is how low could the rates go?
Hard to say. Treasury rates could grind down a bit farther, but probably not much from where they are now. The real issue is that mortgage spreads over treasuries have widened out quite a lot, so even with treasuries at very low rates mortgages have not moved that much. So I think that we will not see mortgage rates drop much unless the extra yield demanded on mortgages declines from here (and does so without treasury yields moving up much).

FWIW, I think the pen fed 5/5 ARM looks quite attractive. But I won't be holding my breath for the rate on that product to get far enough under my current 4.99% fixed note to make refinancing worthwhile.
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Old 01-22-2008, 02:06 PM   #11
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Hard to say. Treasury rates could grind down a bit farther, but probably not much from where they are now. The real issue is that mortgage spreads over treasuries have widened out quite a lot, so even with treasuries at very low rates mortgages have not moved that much. So I think that we will not see mortgage rates drop much unless the extra yield demanded on mortgages declines from here (and does so without treasury yields moving up much).

FWIW, I think the pen fed 5/5 ARM looks quite attractive. But I won't be holding my breath for the rate on that product to get far enough under my current 4.99% fixed note to make refinancing worthwhile.
I'm on a 20 year at 4.875%. Nothing to do except pay extra..........
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Old 01-22-2008, 02:08 PM   #12
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I'm on a 20 year at 4.875%. Nothing to do except pay extra..........
You never know, with Pen Fed. They already beat the snot out of everyone else on rates and fees, so it wouldn't take much to make a refi attractive.
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Old 01-22-2008, 02:12 PM   #13
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I have a 5.75% on a 30 year fixed. Just refinanced in May or June of 07, I think. My guidline is to save at least 8% per payment, so in one year I gain a full mortgage payment relative to what I have now.

I looked at rates today- seeing 5.875% to 5.375% at various sites. When rates get below 5% I am refinancing for sure. Hoping for 4.5% or 4%.

Reminder that the mortgage rate tracks with the 10 year treasury, not the fed rate. The drop in rates changes the price of bonds traded, and the new rate will also be used when the fed sells new treasuries. When this happens you can expect to see mortgage rates drop.

Or that's my understanding, anyways.
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Old 01-22-2008, 03:18 PM   #14
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I have a 5 year ARM at 5.25 that adjusts in another year and a half. I didn't think we'd be in our townhouse for any longer than 5 years but now that we've pretty much decided to keep it and rent it out when we buy a home I'll be looking to refinance into a 30 yr fixed. If I can get near my ARM rate, all the better.
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Old 01-22-2008, 03:27 PM   #15
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I have a 5 year ARM at 5.25 that adjusts in another year and a half. I didn't think we'd be in our townhouse for any longer than 5 years but now that we've pretty much decided to keep it and rent it out when we buy a home I'll be looking to refinance into a 30 yr fixed. If I can get near my ARM rate, all the better.
If that is your plan, I would refi pronto so that the lender cannot make a case that you defrauded them by not disclosing this was meant to be an investment property.

Pen Fed is at 4.875% on the 5/5 ARM right now, FWIW.
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Old 01-22-2008, 04:06 PM   #16
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I'm looking at refinancing through penfed for a 5/5 at 4.875 or possibly madrate at 5.25 for a 30 year fixed. From fatwallet, someone mentioned they paid $350 in total fees using madrate. It sounded like people paid $1-2k in closing costs at penfed, but on the penfed site it has the 5/5 advertised as no closing costs. My assumption was that penfed would cost me $0 to refinance. Does anyone know what the closing costs would be for the 5/5 at penfed?

Currently I have 6.35% on a 30 year fixed through Bank of America, so I think it's time to make a change.
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Old 01-22-2008, 04:10 PM   #17
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This is from the PenFed link I gave above:


No Closing Costs: Fees not covered include, but are not limited to, title costs, recording fees, survey or pest inspection costs, escrow reserves and interest due until first payment. Pentagon Federal Credit Union to pay settlement fee only if the loan is closed by our preferred provider. If the loan is withdrawn or does not close, all third-party fees incurred will become the responsibility of the applicant. Other terms and conditions may apply, please contact a mortgage representative for details. Different terms and conditions may apply in Puerto Rico.
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Old 01-22-2008, 04:16 PM   #18
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My assumption was that most of those fees are associated with a home purchase and not a refinance. What if any of those things would be required by a refi?

Forgive my ignorance here, I have never done a refinance before.
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Old 01-22-2008, 04:21 PM   #19
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When I saw this thread, I double checked something I noticed yesterday and these have dropped .125 since then

15 yr Conforming (80% LTV)
4.375 w/ .5 pts (apr=4.563)
4.50 w/ NO pts (apr=4.613)

There is .75 pt orgination fee or .25 pt interest rate surcharge

.............Im goin to dinkytown!
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Old 01-22-2008, 04:58 PM   #20
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I was in my local Federal Credit Union about an hour ago and the digital screen on the wall behind the teller showed a 15 yr fixed conventional rate of 4.375 and a 30 yr at 5.175! Yowza!!! Unfortunately, I'm in the getting ready to sell mode, not the buying mode. Hopefully the rates will stay low till I can sell & find new digs! I don't know if those rates are with or without discount points, I didn't ask.
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