HELP!! Should I refinance now or later????


My husband and I purchased a house 3 years ago with a fixed rate of 6%. We were strapped for cash and a guy came and told us that he could lower our monthly payments. We were so excited so we jumped at the opportunity. We were very young and not to educated on the housing industry. We signed our way right into an ARM. The begining rate was 4.5% and now we are at 5.5%. I am getting VERY nervous about this and I want to get out. I know that rates are rising and if I refinance now we would get a higher fixed rate and our loan amount would increase about $5000. Do you think it would be wise to wait it out or just refinance at a higher fixed rate?

BTW my credit score s around 630. Thankd in advance for your advice.

Scared of the ARM

How long do you intend to stay in the property? What is your current LTV (loan to value)?

I plan on keeping the house for a while. We have only ha it for 3 years. We owe 131,000(they added on about $5000 when we refinanced the first time) and the house is worth only 138,000.

I would leave it alone. The market is only expecting one more rate hike.

I agree with Patrick (which is scary) ::). I would shift your attention to your credit. It should not take much to get your credit in to the high 6’s low 7’s. That way when it comes time to refi you will have the best opportunity.

Thanks for the good advice. I think I will wait and try to get my credit right so I can get a better rate. You guys are the best!!

Excellent advice .Credit first finance second

definitely work on your credit so when it comes time to refi you can be getting a mortgage using “A” paper…
Have you and your husband started clearing your credit up yet? and do you know how?

You may want to review your loan docs so that you completely understand what you are trying to refinance.

Most ARMS have one or more options concerning the interest rate. For example, most have a limit on how much they can increase in any given year. Most also have a cap limit on how much they can increase in the life of the loan.

At that credit score, the best fixed rate that you’d probably get is 7-7.5%. That’s 1.5-2% worse than you’ve got now. If you’re yearly cap is 2% then your still better off keeping the current loan for now. By the end of the year, interests rates may be much higher, so you’d still be better.


Just one more comment. Everytime you refinance you are starting your 30 year mortgage over unless you do a 15 year. If you keep doing this, your monthly payment may go down but overall, your house will cost you more in the long run.

Who cares how long it takes to pay off its a money machine not a goal to pay every ounce of interest.Open your mind ;D