Home Refinance Rates. Are They Worth It?

Home mortgage refinancing sounds like a good idea, especially with the low interest home loans.

So why would it NOT be a good idea to refinance home loans?

If you qualify, you need to take advantage home mortgage refinancing, but you need to be aware of some new rules that have gone into place to protect all those dumbies that got us in the mess in the first place the lenders.

Determine if your house appraise for enough. This is a tough one in this economy, with house prices dropping.  Even though we had more than 20% down, our house has dropped enough we have lost that and if we can’t get our house to appraise high enough we will be required to carry Mortgage Insurance.

Look for a lender than can offer a good rate, and look around to do this.  Think through what you will need.  Do you need a 30 year loan?  I know for us we are going to be in this house another 5 years.  It’s a big house and when the kids are gone, we don’t intend to stick around.  Too much to clean.

We ended up finding a great rate with a 7 year ARM.  That gave us 2 years to decide if we really did want to move out or if we would need to refinance again.

What does it cost to refinance and is it worth it? With the rate we found, we were going to roll the closing costs into the loan.  We were going to save so much it was going to pay for its self in 10 months.

Getting the appraisal. Now days, because of all the appraisals that happened during the bubble, you no longer get to pick your appraiser. You now have to pull a name out of a hat.

We just so happened to get a gal that was incompetent and paid little attention to detail.

She miss measured our house by 250 square feet.  When houses are selling for $151 a square foot, that starts to add up.  The drawing and layout she did of our house didn’t even match our house.  Plus many other mistakes.

We were warned by our lender that we could get a bad appraiser because there is so many bad ones and they are now able to get work just as easily as the good ones.  The bummer is there is no protection for us as homeowners on this one.  You pay it and hope for the best.

Can you get your house to appraise for enough, even with a bad appraiser?  If not, don’t risk the $400-$500 is will cost for an appraiser.

If you know you can, it’s a great time to consider refinancing your home. The refinancing home loan rates dropped again recently making it even more enticing.

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  1. […] hard to do in this economy, but try and refinance. That could easily save you over $100 a […]