Ok, fortunetellers... real estate interest rates. Advice?

[(vikm)]

I know there is really no way to know what's gonna happen but just looking to see what anyone's thoughts are on the subject.

Currently locked in at 5% (it's the best we can get under a certain type of program we're using). I get one and only one chance for a readjustment for roughly another 30 days. Just got a call that it's at 4.875 and wondering if I should not be greedy and take that and be done with it or...

Any prognosticators? Leaning toward taking it but gotta admit I'm a bit greedy, too.

[davester]

Based on past history, the chance of interest rates going below the current low levels is very slim. They've been hovering at current levels for quite a long time and just took a very minor 0.125% dip. My advice would be to grab the 4.875% if you can.

[(vikm)]

Thanks. I suppose it's similar to the stock market. Pigs get slaughtered kinda thing.

[3d]

.125% dip to 4.875% is so minor I would personally hold out and gamble that it will go lower in 30 days. TDBank and even Chase bank is 4.500% (on 30 year) right now.

[(vikm)]

That's the part that has me feeling greedy (but I think my less risky side will take over). It's gonna save about $8500 over the life of the loan and maybe about $25 or so a month.

The other side to that is even if it goes down another .125, it's not that big of a savings. Can't imagine it'd go down much more than that at a time so the risk may not be worth the gain.

(It's a special program that rates will always be slightly higher than traditional 30 yr. deals.)

[rgG]

As you sort of said, pigs get fat, hogs get slaughtered. Lock in now.

[Paul F.]

You might be better off over the long haul just paying an extra $100-200 each payment period...
Run the numbers and see how much interest you'll save paying down your principal that much quicker...

[clay]

also, what are you refinance costs? paperwork fees? bank fees? etc? If you'd only be saving $25/mo., and fees are $1000, it'll take a while to recoup that.

That being said, if it's easy to do, and the numbers work out in your favor, why not jump on the opportunity? I seriously doubt rates will go much lower...they're already very low.

[(vikm)]

Thanks again to all.

It's a first time loan and not a re-fi, Clay. Sorry if I wasn't clear.

We're planning to pay at least the interest on the delayed second in order to keep that added cost to a minimum after the 5 years is up.

Looks like we're doing the current low rate as most don't see it going down more or "much more" if it does.

TA

[Pam]

Just checked my Credit Union rates; 4.375% for a 30 year loan. No points, 1% origination fee.