Refinance - Posted by Ben

Posted by JPiper on October 25, 1998 at 11:56:05:

It sounds like your existing mortgage is an adjustable rate mortgage.

My personal opinion would be that you should refi in order to lock in a long term fixed rate. These rates by the way are as low as we have seen them in decades. One reason you wouldn?t want to do this would be if you were clairvoyant and KNEW the future course of interest rates was downward. Certainly no one here KNOWS this, if anyone anywhere knows this. To not lock in would expose you to the risk that interest rates MIGHT rise.

The other reason you might not want to lock in would be that you are going to sell the house in the next couple of years, in which case the costs of a refi might not be justified.


Refinance - Posted by Ben

Posted by Ben on October 25, 1998 at 11:26:28:

I am trying to help a friend make some decisions about a mortgage. Is it a good time to refinance a mortgage which was obtained about two years ago? It is an FHA mortgage which started out at 6.5% and has risen to 7.5% since then. I have heard that interest rates may go even lower. What are those “rules of thumb” that one always hears about
refinancing? Thanks for any help.