Should I refinance my mortgage if it is 5% and I can get 3.8%?

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Balance on my mortgage is 480,100.00 This is a preview of my current mortgage rates: monthly payment: 2995.70 rate: 5% of the loan: 5 / 1Datum effect: 21 December 2006Fälligkeitstag: January 1 2037Marge 2.50% maximum interest rate adjustment: 2.0% / 6.0% Max time life life life rate of 11.0% early pay-off: 1 year (ie, no penalty for the moment) Here is the NEW PRICE: Closing Costs: 2500 00monatliche Payment: 2409.83 Rate: 3.875 type of credit: 5 / 1Datum effective 1 2010Fälligkeitstag May: 1 January 2037Marge 2.50% maximum interest rate adjustment : 2.0% / 6.0% Max time life life life rate of 9.875% early pay 3% if paid within the first year’s worth of refinance Please note: I did not have credit card and a non-IRA and annuity, as I help komfortabelIch’m 30 years and I intend beschäftigt.oh my mortgage be paid in 3 years.

  1. Reply
    Love my Meyer
    May 2, 2011 at 7:03 am

    Yes, your first 5 years is almost up and your rate will increase. 5/1 arms should really never be used unless you will be moving or paying off the loans with in the locked in 5 year term. In the next 5 years the rates will go up and your rate will be higher than if you would just get a 30 year fixed loan. It will save you money over the long run.

  2. Reply
    May 2, 2011 at 7:09 am

    No, the fees and terms are not worth the reduction. I would refinance if you can get a fixed rate but the adjustable rates are not significantly different enough to justify any, refinance costs. You are better off applying one additional payment at the beginning of the year toward the principal.

  3. Reply
    May 2, 2011 at 7:59 am

    LOL! Another ING Direct borrower, I see.

    Is it worth it? It depends on what you think interest rates are going to do in the next two years and what is the base index that the 2.50% spread is added to (CMT or LIBOR, and what maturity). I see that your mortgage does not reset until Jan 2012. I would say that interest rates then will be higher than they are now. It is quite likely that the rate in Jan 2012 will be around 5%.

    By my calculations, to make it worthwhile not doing anything, the new rates in Jan 2012 and Jan 2013 would have to be 3% all in. I think that this is unlikely. I would refinance now given that you will pay off the mortgage in three years from now. You save more than enough to compensate for the $ 2,500 fee. You do realize that your next payment, on May 1st, will be at your current interest rate. The new rate would start for the June 1st payment.

  4. Reply
    May 2, 2011 at 8:49 am

    No not if paying off that soon It is not going to save enough

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