5/29/09 Update: I spoke with the mortgage broker and everything looks good, except the value. Looks like my home appraisal is borderline and will the deciding factor on whether or not I am able to refinance. The mortgage broker plans to review the appraisal with two other appraisers to get their thoughts. Hopefully, I'll know something by the end of this week.

I've debated on whether or not I wanted to refinance for a few months now. Rates are the lowest that they've ever been and I don't think they are going much lower.

I started the process last week with my current lender. I've been with my current lender for over three years with no late payments. Their website said that they offered a streamline refinance which meant there would be no appraisal, no income verification and minimal paperwork.

Apparently, that program is no longer available. I received a call from my current lender advising me that the streamline refinance is no longer available and I would need to "requalify" for the loan.

When I applied for a refinance with a current lender, they pulled my credit. Apparently, based on my credit score, Equifax also sent my information to another lender. The lender called me and explained they could offer me a better rate than my current lender. The company is a direct lender and they their own money which means they can offer lower rates than the big national banks.

I provided all of my information and was pre-approved with the new lender. I was able to lock in a fixed rate of 4.5% for 30 years. I received a Good Faith Estimate from the company and the fees are reasonable.

The only thing standing in the way of the refinance is the home appraisal. I need to have at least 3% equity in order to be able to qualify for an FHA loan. The appraisal was completed this past Friday so I'm waiting to find out the value of my home. I think I have enough equity but the only thing that concerns me is that sales have been slow in my neighborhood and there have been several foreclosures.

I should find out if I will be able to refinance later this week. I'm crossing my fingers hoping that my home will appraise high enough to refinance. I would be going from my current rate of 6.375% to 4.5% which would save me a few hundred dollars a month. I'm pretty comfortable with my current mortgage payment so I would continue to make the same payment each month.

Have you refinanced or attempted to refinance your mortgage lately?

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  1. Unknown // May 26, 2009 at 4:38 PM  

    Wishing you good luck with the home appraisal, I'm sure it'll go fine. Sure will be nice to have lower payments won't it?! If you don't mind sharing, what is the name of your new direct lender?

  2. Patrick // May 26, 2009 at 9:46 PM  

    I'm in the process of refinancing at 4.25% for 15 year loan. You can see my Blog post about it at http://money-cake.com/2009/05/analyzing-current-loan-vs-new-1530-year-fixed-loan/.

    Good luck! 4.5% is a great rate!

  3. Rick Vaughn // May 26, 2009 at 9:50 PM  

    Refinance is great if you can do it. I think the big deterrent I see is the closing cost and parting ways with fund in this current climate. However, saving hundreds of dollars each month will add up quickly.

  4. Anonymous // May 29, 2009 at 10:32 PM  

    Did you find anything out yet?

    If I had a better paying job, I would love to get a home now.

    But, being only 19 and still in college, I guess I have to look forward to higher rates :(