Have you been thinking about refinancing?

The mortgage rates are still very low right now, but starting to rise again.  Check out bankrate.com and other online mortgage rate services for the most recent rates!  In November, inflation started to increase, and that means that the Feds will be looking hard at whether to raise rates again!  Unemployment is still high, so they might hold off for a little longer.  But do you want to take that gamble?  If I didn’t have my mortgage load practically paid off, I would be looking “high and low” for a good deal on refinancing my loan!

If I were to refinance today, who would I want to refinance with?

Wells Fargo!  They are the only company that I refinanced with for the duration of my mortgage!  Actually they shipped me a document in the mail that offered to refinance my mortgage.  I asked people I work with about Wells, and they said that Wells Fargo is an excellent company based in California.  Uneasily, I bite on the bait left by Wells, and was pleasantly surprised with them!  I got a competitive rate, 4.875% for 15 years and no closing cost!  I couldn’t believe it!  I had excellent credit, and I’m sure that was a big part of it, but still… NO CLOSING COST!

I don’t know if Wells Fargo still offers that offer today (actually I don’t know how the proposal got to me in the first place), but I’ve been extremely happy with it.  Wells Fargo has an excellent reputation!  It’s one of the few banks (other than Goldman Sachs), that Warren Buffett owns (and he doesn’t hold poorly managed companies).

Before you consider refinancing, make sure the following are true:

• You’re going to stay in your home for at least 5 years
• If you refinance, you don’t have to pay PMI (since the value of many homes has decreased, the amount of equity you have in your home might be less that 20%).  This happen to a buddy of mine, he went in to refinance has mortgage, but the reappraised value of his home had than 20% equity in it.  They said they would have to charge him PMI, so he ended up passing on getting his house refinanced.
• You’ll need to make sure it makes sense financially.  I’m a number cruncher, so I use excel or Openoffice Calc.  If you search online, you can probably find an online app that will do the hard part for you: like the one at www.dinkytown.com click here for a good refinance calculator

Below are additional things I would consider:

• Which type do you want a Fixed or ARM mortgage?  I prefer a Fixed Mortgage!
• Look at other term mortgage, such as 20, 15 and 10 year mortgages.  You can also go the other way 35 and 40 year la
• Make sure you can make extra payment against the principle, and how to do that (ask!)

If you do decide to refinance, I wish you the best of luck!  It worked out really well for me.  I went from a 30 year mortgage down to a 15 year mortgage.  I then made extra payments, so that I’ll have the mortgage paid off in 11 years since I initially took the first loan out.