[Rvlec]

Who has the best mortgage rate right now? I heard it is only to your advantage to refinance if you are getting at least a full point lower interest rate-is this true?

[stevetcg]

It really depends on how much the refi is going to cost you. If it doesn't cost anything and doesn't increase the balance (i.e. rolled up closing costs) then even 1/100th of a point is a few bucks saved.

In the real world, even a 1/4th point is worth looking at. Just factor the closing costs vs. the amount saved over the expected life of your loan.

For example - if the total cost of the refi was $2000 and it saved you $50/month in payment, if you expected to keep the loan for over about 3 1/2 years it would be worth it.

This is a pretty simplistic approach but it will give you a pretty good idea if refinancing is right.

As for the best rate, I am being offered rates in the low 5s at the moment but have seen them listed in the mid to high 4s for A+ buyers. The only real way to find out is to talk to a few people and see what you qualify for.

[sandkicker]

Who has the best mortgage rate right now? I heard it is only to your advantage to refinance if you are getting at least a full point lower interest rate-is this true?

"Right now" is key here. Mortgage rates change AT LEAST once a day, sometimes three times a day. The lender with the best rate at 10:30 am (usual first price fix) may not be the same one with the lowest rate at 1:00 pm. Shopping for the "lowest rate" is tricky, since its not the lowest RATE, but the lowest APR. Wht is the difference?? Rate is the interest rate of the loan that determines your monthly payments. APR is a recalculation of the rate to reflect any fees and points that the lender/broker may charge. While most folks shy away from points, sometines they make sense. Since many folks feel negatively about points, many not totally honest lenders charge an "Origination fee" of one point so they can quote a lower interest rate on the loan. Under Federal law, an "Origination fee" is the same as a "point".

An honest and upright lender will quote you as follows.. : rate "A" at Zero Points ( and no origination fee", rate "B" ( a lower rate) if you pay "x" points, rate "C" if you pay "y" points. They will also do the calculation for you that will show how many months it will take to recoup your upfront points/fees payments in monthly savings...

ALSO and a real biggie here, is the rate you get quoted in MEANINGLESS until you have a signed rate lock agreement in your hand and have completed ALL underwriting requirements for that rate AND have a signed mortgage commitment in hand.

You should also get a signed copy of a Good Faith Estimate and a Truth In Lending Disclosure EARLY in the process... preferrably before application. Under the law, it has to be sent to you within a few days of submitting an application.

When to refi??? It all depends on: How much your monthly payments are reduced and how many months it will take to recoup the costs of getting that refi from the reduction in monthly payments. Anything beyond 24 months, to me, is shaky.


BTW... "Bankers" have no real advantage over "Brokers". We all get our money from the same "pot" and despite claims to the contrary, "Bankers" do not really "lend their own money", since in 99.9% of the cases "Bankers" sell their loans within 30 to 60 days, just like brokers (who sell them immediately). The difference is "cosmetic" at best.