Refinance Now or Wait? (loans, fixed rates, interest rate, foreclosures)

[sreeni999]

My 5 year ARM 4.625% is ending April 2008. Assuming a good credit score of 720-760 for both of us, what do the experts advise?

Given the sub-prime market conditions, do you see the fixed rates going down or up in near future. We are looking to refinance for 15 or 30year fixed loan.

Estimated Fair Home Value: 225-250K
Loan Amount: 160K

What do you advise? Should we wait until December or January? Or Refinance now before rates get worse

Thanks in advance.

[shellytc]

Hopefully we will hear some good news September 18th. I would talk to your mortgage person towards the end of september and start the process.

Shelly

[UseJeff]

There's a massive amount of loans that are due to go adjustable around October (more than typical) so people are expecting a huge run of foreclosures starting in January... So, with that said I think investors have already been spooked so there shouldn't be a huge negative effect on rates from that... The value of houses appears to have steadied now, but I doubt many people will gain much over the next few years...

So with that stuff in mind, and the possibility of a government bailout I think rates may drop some over the next 6 months. The thing is you're an "A paper" borrower, and your rates change daily. If the stock market has issues, then people will buy bonds and rates will get better...

No one really has a crystal ball, and experts can only estimate... in addition since the interest rates you will end up having access to can fluctuate as much as a full half percent in a two week period it's really just going to be a guess.

I would come up with a target rate within a targeted time frame... have your lender watch for that rate, and if it drops to it, then lock it in and refinance then. Worst case you can pay a couple points to get a flat 6% or possibly into the high 5's... It almost always makes sense to buy down your rate when you are doing a fixed rate.