randomguy

Any of you mortgage gurus-

Have a house purchased 1.5 years ago for 246k. Probably worth around the same now. Interest rate of 6.65% on 30-yr fixed. With Fed cuts, think it's worth it to refinance?

Stephan Dupourque

Here's a good article on the subject:
Three Rules Of Thumb For Mortgage Refinancing

There are lots of reasons to refinance, depends on your goals, whether they are short term (selling in less than 5 years) and long term (keeping it for 10 years or more). First, start with the big picture. If you have 28.5 years left on your current mortgage, figure out the total interest you will pay in those 28.5 years. Then, figure out the total interest you will pay on a new 30 year loan. The payments will be less on your new loan, but overall, you might be paying more, especially after you factor in the closing costs of refinancing and you put them back into the new loan.
If you're a little bit of a gambling man and are thinking short term with a 3 or 5 year ARM (adjustable), and can get a lesser interest rate, then it might make more sense to refinance. But if you're thinking long term and the interest rate isn't low enough to offset a new 30 year loan with closing costs, probably doesn't make much sense.
Just remember to compare apples with apples on the overall cost of the loan by remembering that you are going from a 28.5 year loan to a 30 year loan.

beto

This will all depend on what your home appraises for and if it is well above your purchase price. The other factor to consider is you closing cost needed when you refinance. I ask they same question to one of my mortgage friend and she said it was not worth it. She mentioned that if the interest rates went down to about 5% then we could look at the option. Hope that helps.