To determine your trigger point for refinancing your home you need to do a gut check with yourself. What I mean here is that while you do want the lowest rate possible, you also need to look at what is a payment that you can be happy with even if rates continue to go down. You also need to have a "I'm not looking back" attitude about your refinance. Make an agreement with yourself to not ask the "what if I had waited".
Risk Of Waiting Is Too Risky
If you can lower your payment a few hundred dollars with a refinance now, and that would make a difference with your budget, you should look yourself in the mirror and ask if the risk is worth it to wait. Is it worth the risk to you to possibly not be able to refinance if your home value goes down too much while you were waiting for the lower interest rate. It is like a race, wait for rates to get better or have my property value go down so much that I can't refinance?
Bought Your Home Before Summer 2007 Good Luck With That Refinance
If you bought your home before the summer of 2007, you run the risk of having your home's value go down below where you might expect it to be. You will need to check out your home's value and compare it to your mortgage balance. If you haven't done this in a while you may be surprised by the change in the equity that your home has. This could be especially surprising if you put a good chunk of money down on your home when you bought. This money could be eroded away by now. You may find yourself having to look at PMI where you didn't before when you bought your home. You may also find yourself without being able to refinance - this could be especially true if you wait too long.
Best Advice About Refinancing - Call A Mortgage Loan Officer To Learn Your Options
If you are thinking about refinancing, get in touch with a mortgage person right away to see what your options are and what your payments are right now with a refinance, or if you wait for a lower rate. Find out what the difference in your monthly payment will be for every .125% or .25% in your interest rate. You may be surprised to hear that what you have been waiting for with getting the extra .125% in interest rate isn't really that big of a deal to your bottom line.
You will likely discover that the angst, stress and anticipation that comes with gambling on interest rates and decreasing property values just isn't worth it for the small amount of savings that extra .125% will get you. To make up for the extra little in your mortgage payment, you could eat at home one more time per month.
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