Thinking About Refinancing

Fixed mortgage rates are now hovering at around 5%, which makes me think that refinancing my 5.75% might be a good idea. I shopped around a little, and it looks like I could get something around 5%-5.2% with 0 points (I’m points allergic). However, closing costs are around $2000.

I used this calculator to see if refinancing is really worth it for me. It tells me that at the current rates, unless I plan on staying in my home for a minimum of two years, I should not refinance. So will I stay in my house for at least two more years? That’s tough to say. I probably will, but I also am on the lookout for great deals in this buyer’s market. So unless rates come down even further, I think I’ll hold off on refinancing.

However, I was made aware of the following: if your lender and servicing agent are the same company (which is rare, but mine happens to be both), they may just lower your existing rate if you threaten to take your loan elsewhere. They might charge you an adjustment fee, but nothing near what refinancing closing costs would be. Apparently, others have this same idea, as I’ve not been able to talk to a human there yet despite being on hold two separate times for over 20 minutes. I will let you know what happens when (or if) I finally get someone on the phone.