Everyone tells me that this blog has become perhaps a mite gloomy over the past few days . . . weeks . . . months. So let’s look at one of the rare bright spots in this financial Twilight of the Gods: mortgage rates. They’re really low. So low that my husband and I, who bought our house last October, have been seriously considering refinancing. I thought it might be worthwhile looking at how we made the decision.
Our mortgage is currently at 4.5%. But our credit union is offering rates as low as 3.875% on a 30-year fixed, and 3% on a 15-year fixed. Since ceteris paribus, I would like to give my bank less money, this is tempting.
However, those rates aren’t free. They require hefty buy down: 2.75 points plus a 1% origination fee to get to the 3.875% for a 30 year; 2.65 points plus a 1% origination fee to get to the 3% for a fifteen year. When you add in the other expected costs of closing–title insurance, recordation fees, and so forth–we’re talking about thousands and thousands of dollars, plus roughly $2000 in closing costs, and another thousand or so in bank fees.