With interest rates dropping to 5.5%, have you thought about refinancing your principal residence? You're not the only one. Since November last year, refinance applications have risen 92%, and up 16% over the last few weeks, according to the Inman News article "Refi applications climb 16.9%."
According to Jay Brinkmann, the Mortgage Bankers Associations vice president of research and economics. "With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40- to 80-basis-point drop in rates we have seen since Nov. 2 across products."
I refinanced several of my properties when the interest rates were hitting historical lows a couple of years ago. Now the rates are even lower than when I refinanced before. Is it worth it to refinance? It depends on what your present interest rate is, and on what you use the money for. If you re-finance to buy another property, you're on the right track. Of course, you have to balance that against borrowing too much and over leveraging your real estate investments.
Time to refinance? Maybe not, but it might be worth thinking about.
For more insightful perspective on mortgages see:
The Mortgage Crises Has a Silver Lining (and other truths you won't hear on cable news this week) at Bigger Pockets.
Info on Terry's Book
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5 comments:
That's exactly what we're doing (besides the rest of the chaos and the reason for the search for the survey)- refinancing our principle residence now to get those payments lower and improve cashflow.
Been trying to figure out whether to refi an investment property, but not sure the numbers work... it's a good time to reevaluate that sort of thing. I'll be giving the financial calculator a workout this weekend.
(...and I'm glad you liked the article :) )
We're at 5.25 on our home loan so we're no were close to considering this option. I am watching the rates though!
Connie,
I have a rate of 6.125% on my principle residence, so I'm going to run the numbers too.
I think your posts at Bigger Pockets are really insightful and written with great style.
rentals "r" us,
You have a super rate. I don't think you'll ever top that.
My wife and I didn't want to have a mortgage into our retirement life.
Thus we picked up a 15 year 4.625% rate at the end of January, shortly before your post.
Our investment property has fixed at 7.5%, and HELOC @ 6.25%. Once we get it ready to resell/rent, we'll figure out how to approach the options at that time.
Chris,
That sounds like a good rate on your 15 year loan.
It seems that getting a new loan, or refinacing, is not as straightforward as it used to be. With the new fees that are being added onto to housing loans in 2008, it makes it a little more expensive.
Let me know what you decide with the investment property.
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