What exactly I'm looking for when refinancing my condo?

Question

I was just looking for a better interest rate, don't want money back and intend to move as soon as I can.

Answer 1

Choosing fixed or floating depends on your personal financial situation.

Right now, since interest rates seem to be on the rise, a fixed option would seem to be the smart thing. Will you choose a 10Y fixed or 30Y fixed? These will break your payments down into different repayment periods, so obviously you will have higher monthly payements if you choose a 10Y fixed rather than a 30Y fixed, but overall you will pay less interest for a 10Y fixed because the term is shorter and the rate you pay should be less (because a 10Y loan is generally less risky than a 30Y loan for the bank).

Also, you want to make sure that your rate is not a "teaser" rate, that it will be fixed for the life of the loan and that there are no "points" payable with the mortgage.

Points are percentages of the mortgage you pay upfront to lower your overall rate. This means that the amount you borrow will be larger (if you roll points into your mortgage) or you will pay up front for a lower fee.

Closing costs are also important. Some banks charge you alot for processing and other items, like legal fees, insurance and credit checks. These are all also payable upfront.

Compare national averages for all types of mortgages here:
www.bankrate.com

The site also shows you points included and fees.

Good luck!!!

Answer 2

If you're intending to move soon, do NOT refinance! You'll never get your re-fi costs back unless you have an outrageously high interest rate right now and can qualify for the best rates now.

Refinancing CAN be a good idea if you are planning on staying put for a few years. You need to take the total cost of refinancing -- it can run as much as 5% of the refinanced amount -- and divide it by the monthly savings amount to see what your payback period is. If you plan on selling sooner than that, don't waste your money with a re-fi.

For example, if it will cost you $5,000 to refinance to save $100 a month your payback period is 50 months -- a little over 4 years. If you intend to sell in less than 4 years, a re-fi is NOT a good idea financially.

Answer 3

I'm confused on the "move" part. Move into or out of the condo, or just move on the process of getting it refinanced.

A general rule is to make sure that your closing costs can be recouped within two years. So, if you have $2000 in closing costs, then you want to make sure your monthly payment drops enough for you to save $2000 within two years. This is just a general rule, though, and only applies if you don't plan on living there for a long time. If you truly intend to stay there until it is paid off, then any drop in the interest rate is good. But, you don't want to pay $2000 in closing costs (which will be rolled back into the loan by the way - you don't need cash to do that), and only drop your payment by $50/mo when you are planning to move out in 3 years. It's just not cost effective to do it.

Answer 4

If you expect to be moving soon, obviously doing nothing would be a good first option. Otherwise simply find the best no-cost and no-prepayment-penalty mortgage that you can. Have a competent mortgage broker do a credit pull and find the best rates. Get a copy of your credit report from them (they are required to give you a copy) and then have one or two others do the same process for you, only without pulling your credit report. They can use the one you give them to give you these answers.

Get Good Faith Estimates and Truth-In-Lending disclosures from everyone, and have them lock your rate. There should be no application fees, no lock-in fees, and if you are truly getting a no-cost loan then your principal balance shouldn't be going up and the best deal should be self-evident.

Good luck!

Answer 5

To get the best rate I recommend First National Banc Corp. They do business in most states and are your best opportunity for someone to say yes. ADDITIONALLY, IF YOUR CREDIT IS SUSPECT, THEY SOMETIMES FRONT THE MONEY TO GET YOU INTO A CREDIT RESTORATION PROGRAM SO THAT YOU CAN QUALIFY FOR A LOAN. Check out the free evaluation form at the source website and a First National loan officer will contact you within 24 hours. Good luck.

Answer 6

if that is the case look for a no pre pay loan. Also you want a low rate and closing costs shop different lenders..

Answer 7

"Look for" fees associated with the refinance. Those fees may offset any interest rate reduction, especially if you plan to sell soon.

Answer 8

a fixed low interest rate is all.

Answer 9

If you are planning to move DO NOT refi.

Answer 10

streamline your mortgage with your bank.