Mortgage experts: If you bought a house with 8% Mortgage how

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Forum -> Household Management -> Finances

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amother

Wed, Jan 03 2024, 7:07 pm

If you recently bought a house with an 8% mortgage rate, how long will you wait to refinance, even though its 6% now.

Ive been told that because were in an election year, its going to drop more, so its better to wait.

What are the pros and cons of refinancing now?

How long do I have to wait after purchase to refinance?

Whats the downside of refinancing?

amother

Wed, Jan 03 2024, 8:35 pm

bump

jd1212

Wed, Jan 03 2024, 9:19 pm

A mortgage banker told me it can make sense to refi even for a 1% decrease

amother

Ghostwhite

Wed, Jan 03 2024, 9:25 pm

you can have a mortgage broker run the numbers to see if it makes sense for you

amother

Tangerine

Wed, Jan 03 2024, 9:47 pm

houses will go up in price when mortgage rates go down so really its never the right time to buy - only today
you can go for a hard money loan interest only for 12 months and then take out mortgage..

amother

Starflower

Wed, Jan 03 2024, 9:52 pm

I work in a mortgage office. So far we have not told our clients to refinance yet as rates are still set to go down more this year. You can always have your mortgage broker run the numbers though and see if it makes sense for you.

amother

Babyblue

Wed, Jan 03 2024, 10:19 pm

Any idea how low they're expected to go? Below 5.5?

amother

Wed, Jan 03 2024, 10:34 pm

amother Babyblue wrote:

Any idea how low they're expected to go? Below 5.5?

If my mortgage person said not to do it yet, I assume they think rates will go quite a bit lower.

amother

Snowflake

Wed, Jan 03 2024, 11:01 pm

amother Tangerine wrote:

houses will go up in price when mortgage rates go down so really its never the right time to buy - only today
you can go for a hard money loan interest only for 12 months and then take out mortgage..

The right time to buy was several years ago Sad

amother

Wed, Jan 03 2024, 11:05 pm

Can a Mortgage expert answer:

How soon after closing can you refinance (I closed a few weeks ago, at 8%)?

Is refinancing costly to the homeowner, and is there a limit to how often you can refinance?

Whats to stop someone from refinancing now that rates dropped from 8% to 6%, and then again when it dips another point?

amother

Garnet

Wed, Jan 03 2024, 11:19 pm

From what I remember but I can be totally wrong is that you need to wait at least 2 years of mortgage payments and never being late.

Also it costs a lot of money to refinance so that might be the reason why people don't refi every time it's drops a percent

amother

Mulberry

Wed, Jan 03 2024, 11:45 pm

For starters this link can help you
https://www.cnn.com/cnn-unders.....tgage

Best idea is to reach out to a decent mortgage broker. Generally they will be more than happy to advise you on your particular situation.

chestnut

Thu, Jan 04 2024, 12:21 am

Refinancing isn't cheap. The cost gets rolled into the new mortgage usually.

amother

DarkKhaki

Thu, Jan 04 2024, 12:43 am

amother Garnet wrote:

No, you do not need to wait 2 years.... most loans there's no waiting period. You can finance whenever you want.

BUT ... each time you refinance it costs money, usually about 1-2.5% of the loan amount, depending on where you get your loan.

If you need immediate relief, refi now then again next year.

If you can wait it out, wait till November/December of next year.

amother

Starflower

Thu, Jan 04 2024, 3:05 am

You can usually refinance right away if you want. There are ppl who do delayed financing, buy with cash basically and refinance right away. Refinancing is like a regular loan and cost money and closing costs. You need to sit down and see how many years it takes to recoup the costs to see if it's worth it. Lots of times you can roll the closing costs into the loan but not always.

amother

Bone

Thu, Jan 04 2024, 7:41 am

There are closing costs to refinance. That's why people don't do it for 1% (usually). Closing costs can be anywhere from 5k to 20k. Yes, the costs get rolled into the new loan but it's a big process and has fees associated with it. If I closed at 8%, I would wait until next year and see if rates go into the 5 range. Good luck!

mmyy

Thu, Jan 04 2024, 7:43 am

Is your mortgage a 5 years fixed mortgage?
(most of them are) When you break a mortgage in the first 5 years there is a penalty to pay. The rule is usually as follows:
You will have to pay 5% of the outstanding balance if prepaying the loan in the first year, 4% in the second year, 3% in the third year, and so on.
So, lowering your interest rates needs to be significant to overcome that expense.

amother

Brown

Thu, Jan 04 2024, 12:15 pm

mmyy wrote:

In the states people generally get 30 year fixed when buying homes.
I know it’s different in Canada

Arep

Thu, Jan 04 2024, 10:12 pm

amother OP wrote:

Assuming you're only refinancing your existing loan amount, and not cashing out you can refinance whenever you want. But, in the first 6 months your (original) mortgage broker loses all of their compensation. (Needs to repay it to the bank)

Refinancing definitely costs, but there's no limit to how often you can do it. Some states have mortgage tax, which is 1.8%, for all loans you need to pay title fees, broker fees & closer/attorney fees.

The thing stopping people from refinancing multiple times is the costs involved and the hassle of the process. Also, depending how much you're paying in points to get a specific rate, it's potentially lost money if you refinance it after a short time. (In other words, it would've paid for you to take an original higher rate and pay less points upfront, because the difference in your monthly payment is cancelled out by the upfront fee.)

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