I can’t say I am 100% done settling into my condo nor have I completely decorated it yet, but I am looking in refinancing already. Not even 6 months have passed. I don’t even think all my friends have visited yet nor have I had an official house warming party. The fact is, interest rates have been falling as of late. At a rate that it is worth my while to refinance. Especially if I can have my condo appraised at my purchasing price, which means I still have 20% downpayment. I will be taking advantage of the lower interest rate because it will save me around $200 a month. The kicker is all this will be done at no cost to me. Who doesn’t love free money?
And I am not part of the ongoing problem the United States faces with the whole bad loans, foreclosures, etc. problem. I put in my 20% downpayment on my first home, I have exceptional credit (last time I checked, it was above 760) and both my wife and I are employed (not in the real estate/mortgage/financial services industry). I cannot be certain how my place will fare through 2009 and 2010; and I may have overpaid, but still, I plan on staying here for awhile. It really was not an investment vehicle like most people felt buying their place in 2004 through 2006. Betting that the market will continuously grow without a bubble to burst. Which, eventually did, and now we have too many defaulting on their loans, abandoning their homes because their interest rates skyrocketed because they did not get or qualify for a fixed mortgage rate and actually believed they could pay off the initial (down deposit loan) in say 5 years.
Lessons to be learned. However, if you are fortunate enough that you are able to refinance your mortgage loan and your investment is still holding its value, take advantage. As of last week, interest rates were hovering around 5% where 6 months ago, it was around 6.5%. So go out there, investigate, and lower your monthly payments!