I submitted my info to LendingTree.com a couple days ago and have been talking with mortgage people all yesterday. At the moment, the best rate I can get is 5.125% with 0 points. My current rate of 5.75% is already a decent rate, but refinancing would lower my minimum monthly payment by about $100, while increasing the amount of principal I pay each month. I would recoup my refinancing costs inside a year, but I'm still not sure if it's worth it.
The worsening economy hints that interest rates may fall further, but every month I wait, I'm effectively adding $100 to my closing costs. I'm not sure if refinancing works the same way as a first mortgage, but with my first one, it was best to close at the very end of the month to reduce the amount of prepaid interest you have to pay. Sometime next week I think I might be going to the Community Home Lending offices and discussing the timing of everything. It may be that I have a few weeks to think about it just waiting for an optimal closing date.
What are other people's thoughts on refinancing? Any questions I should definitely ask?
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