Mortgage Refinancing Conversations - Q1 2008
I feel kind of bad. One of my friends is a mortgage broker and I told him I would give him a call after he got back from vacation about possibly refinancing.
That was a month ago. I feel like a jerk for dangling some business in front of him and then not calling.
But since that call I had dinner with another mortgage broker. We had a casual chat about refinancing and the current mortgage situation. Turns out this guy is doing about 1 mortgage or refi a month right now, whereas a year ago he was doing 5 or 6. Because of this, he’s going back into telecommunications on a short-term contract to bump up his income this year. I didn’t ask the other broker at dinner how he’s doing, but I am sure he’s also doing a lot less business as well this year.
I mentioned that I was going to call this friend of mine about a refinance, but the guy at dinner asked me about my current rates and stuff. He told me that my primary 7/1 ARM at 5.75% with a fixed 7.18% HELOC is still pretty good. He basically advised me that it’s not worth it to refi now since I would have appraisal, closing costs, and opportunity costs of my free time to do this. He told me to wait till rates fall another full percent before trying to refinance. Before I told him about how much equity I had, he told me the HELOC was quite high at current rates of 1% above prime. Then I told him I have less than 20% equity and he backed off that position.
Since I have 3 years left before my mortgage adjusts, I think I’ll just wait out the current situation. Per my earlier post about my goals and HELOC, while not upside down on my mortgage, I certainly do not have enough equity built up in this declining housing market to make up 20% equity in my condo. I’d still have to have a 2nd trust to avoid PMI. (And I’m one of the lucky ones. Because my condo shot up 25% at the peak of the Northern VA housing market, my valuation had room to fall. I’m still valued much higher than my purchase price.)
So for right now, unless Ben Bernanke makes a slew of cuts again with the FOMC in Q2 2008, I think I will hold steady and focus on paying back my credit cards for now.
livingalmostlarge wrote:
Same here except I have 4.5 years left on a 7/1 ARM, no heloc, and my rate is 4.25%. If I got a 30 for 5% I’d do it. Otherwise I’m sticking with it.
Posted on 08-Apr-08 at 10:15 pm | Permalink
Twiggers wrote:
UGH….I have 6 weeks left before my ARM resets! I’m not panicking yet, but I don’t have 20% equity either (maybe around 10%). However, I really don’t want to risk my mortgage rate increasing up to 10.25%. We’re only staying in the house another 18 months, but the risk is too great. I hate uncertainty!
Posted on 15-Apr-08 at 6:25 pm | Permalink
commercial mortgage wrote:
True dat. We brokers are doing less bidness.
Posted on 03-Jun-08 at 3:01 pm | Permalink