My sister just bout a home about 3months ago and her intrest rate is 10.64% and I was wanting to iknow does she have to wait the full year to refinance for a lower intrest rate?
2006-09-27 06:53:26 · 8 answers · asked by jai h 1 in Business & Finance ➔ Renting & Real Estate
I don't think so but refinance has its own costs....so refinance too often can really add up. My question is why she got such a high rate only 3 months ago.
2006-09-27 06:59:17 · answer #1 · answered by Brand X 6 · 0⤊ 0⤋
She can definitely refinance any time after purchasing. However the new lender will only take the purchase price as the value. So if she did 100% financing a new refinance would cost her more money out of pocket for the closing costs.
Also there has to be a reason she received such a high interest rate, either bad credit rating, high loan to value (100%), or inability to verify income.
I'm willing to bet on the bad credit given that high rate. She can look around for a better rate. Chances are she won't find anything better to warrant action now. The best route for her to take is suck it up with the current rate and make 12 months of on time payments. This will increase her credit rating. Also she might gain some appreciation in the property's value over the 12 months making her a lower risk to the lender.
If she is going to refinance right now and has to pay the closing costs out of pocket. She should figure out how many months it will take her to recover those closing costs from the monthly savings. If she can recoup them within 2 years and she keeps the loan for longer then it is a smart move.
2006-09-27 08:59:10 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It's always a great time to refinance if you can save money and the numbers are good financial sense. As a nationwide mortgage broker and tax preparer, I can review both. 10.64% is high so I'm guessing there may be credit issues? She may also have a prepayment penalty on her old loan. If so, waiting may make sense until that expires. If her credit is good or getting better, she may qualify for a better loan that still makes sense. I suggest a good review of the entire picture. Worse case, you learn a goal of when she should consider refinancing. You can contact me at http://www.slarson.com/contact or steve@slarson.com
Regards
Steve Larson
2006-09-27 09:14:08 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Not sure why she got 10.64%?! 30 year fix is now as low as 6.4%, which is close to lowest in past 40 years. Refinance now! and don't use same loan agent.
2006-09-27 21:14:48 · answer #4 · answered by Price is what you pay for value. 3 · 0⤊ 0⤋
No - at worst (and this doesn't usually happen) she might have to pay early termination fees on the loan.
Something most people don't realize is that a new loan is an entirely new deal/contract with somebody else. The old loan simply gets paid off and extinguished.
2006-09-27 08:53:34 · answer #5 · answered by larry n 4 · 0⤊ 0⤋
No, she can refi anytime.
But good god that's a high interest rate. She might as well look around, see if there's anyone who'd be willing to give her a reduced interest rate. It couldn't hurt anything.
2006-09-27 07:00:37 · answer #6 · answered by Brian L 7 · 0⤊ 0⤋
that is a high rate, but something tells me its not outlandish due to her lending risks.
Can she refi, yes.
Lower rate and payment? almost positive
Makes sense? depends on many, many factor.
e-mail me if you want to know those factors, then get help on deciding if it is beneficial or not
2006-09-27 07:23:02 · answer #7 · answered by cjkloanguy@yahoo.com 2 · 0⤊ 0⤋
Jai, email me and I can help her out, I work for a national lender.
Email me and I'll send you my contact information.
Thanks, David
2006-09-27 13:18:25 · answer #8 · answered by David F 1 · 0⤊ 0⤋