Your Questions About Mortgage Refinancing Rates

Ken asks…

why does it say you can get lower mortgage rates.?

i see all the time you can get mortgage refinance rates for around 4.5% but when you speak with someone and then it ends up being 5.5% my credit is good and i’ve been approved but then they hit you with well its 5.5% now etc… what would be some good lenders to speak with ,without all that babbling stuff just explain it in better terms..

John answers:

The rates used to be set by law. That was changed. So you can have any rate you want. Today you can get a 30 year fixed rate mortgage at 5% which will cost you $3,800.
A 6% fixed rate will cost you zero.
A 4% fixed rate (not adjustable) will cost you $12,000.
You get to decide what you are willing to pay. If you choose to pay $12,000 and then decide to move or sell in one year…. You don’t get any of your money back. So it is always a gamble.

You are correct that most of the ads are misleading. They promise you a lower rate than you can actually afford to get. The costs are always higher or the interest rates are higher.

David asks…

Where can I find the lowest mortgage rates and refinance rates in the USA on the internet?

Do you think the rates have hit bottom?
We like to use a local mortgage broker but the last time they did not over us the lowest rate out there. We knew the lowest rate from so we got it. no longer lists the lowest rates in the US. Need another source

John answers:

It’s not just the rates you want to compare, look at the total loan package.

I just had a client go to an internet lender for a quote and the GFE was $5,000 more than the local lender, and if the refinanced in less than 5 years, there was a big penalty.

Thomas asks…

Mortgage Refinancing and Fed Rate Drop?

The Fed is expected to drop interest rates again soon (50 basis points, maybe as much as 75 basis points). How is that likely to affect the mortgage refinance rates (would it be better to wait a few days or to refinance now)? Thanks

John answers:

I wouldn’t do it just yet because it takes awhile for the secondary market to adjust pricing and it doesn’t necessarily happen when the Fed makes a move. In recent years the rates go the way the market is moving. If you’ve noticed recently, the rates have dropped considerably, right along with the market.

The credit writedown info hasn’t all been released yet, and there is more bad news on the way. In addition to that the greatest amount of mortgages slated to adjust is set for Feb. And March of this year.

If I’m doing this I’m looking at Ground Hog day, to see where it’s at. My opinion 2008 will see rates down the entire year. The Fed will pull out all stops to keep the wheels from coming off the wagon. There should be some good deals as a result. Add to that the notion that the “talking heads” have finally caught on that the R word is either here or knocking on the door, and I would wait.

James asks…

Home owners: with mortgage rates at 2yr lows today, have you thought about refinancing?

If not, what’s holding you back? Hope for lower rates, lack of equity, market or employment fears, or is it something else?

John answers:

Interest rates are pretty great right now, but my 30-year fixed is still lower than anything I can get without paying a ton of points up front.

Rates are going to have to come down another 1/2 a percent or so before I’d even consider it.

Chris asks…

what mortgage company has the best refinancing rates in Ohio?

John answers:

Your going to lose more time and money shopping too much, rates are low right now. Pick an honest lender, then shop the rate, if it goes lower ask the lender to lower their rates. I’d advise staying away from brokers, stick with major lenders like your banks, Countrywide, Quicken Loans, DiTech…etc. Get 3 quotes and go with one. Rates are low but starting to rise.

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