How to use the drop in interest rates to refinance your home mortgage and get a better deal. [Kiplinger]

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  1. sickofthis says:

    We’re doing this right now – going from a 6.75% 30-year loan we got in late 2001 to a 5% for 15 years. The payment will be about the same, and we’re getting rid of the $100 per month mortgage insurance premium.

    Rates are very volatile right now, changing as many as 4 times a day. If you see a rate you can live with, lock it in FAST.

  2. mantari says:

    @tmccartney: I’ve been looking at doing exactly that. I think I’m going to hold out a little longer. If the Fed dropped the interest rate 3/4 points, I figure their next move is going to be neutral or another drop.

    The only thing I don’t understand is how mortgage rates seem to float on their own to some degree. I have no idea what that is tied to.

    Bankrate.com (disclaimer: no affiliation, other than a user) is my only way of understanding the market rates: 15/30 year mortgage rate graph, past 6 months

  3. mantari says:

    Bankrate experts say that the rate has bottomed out, for now. [www.bankrate.com]

  4. WhatThe... says:

    @tmccartney: Exactly what we are doing. Saving upward of $15,000 in interest over the course of the loan…

  5. FightOnTrojans says:

    Exactly what I WANT to do. Gotta wait one more month before my wife has 3 months verifiable income. Then it’s re-fi time!

  6. sdub says:

    Mortgage rates are tied to the 10 year treasury bond yeild (long term debt), as opposed to credit cards and other loans that are tied to the federal funds rate (short term debt).

    When the economic outlook is bleak, people move from stocks into bonds, making bond prices go up. When bonds are expensive, they’re less valuable, so the yield goes down. Mortgage rates are very closely tied to this 10 year treasury bond yield.

    To see what I mean, look up TNX on Yahoo! Finance.

  7. sdub says:

    Forgot to type my main point… Mortgage rates are low when the economic outlook is bad. Federal rate cuts are meant to reverse that, so Fed rate cuts are NOT necessarily a good thing for Mortgage deal-seekers.