Mortgage Rates Drop Even Further

National Mortgage rates have dropped a bit more than my last post a few weeks ago. I don’t know about you but I haven’t seen rates this low, ever! Below is a screenshot from Pentagon Federal Credit Union’s Mortage Page.

I use Penfed as my basis for mortgage rates, since they seem to have some of the lowest around. Can you believe 4.375% for a 30 year conventional mortage with no points??? I just refinanced at 4.5% and am now kicking myself since rates seem to keep dropping. If you are in a rate over 5% and want to reduce that monthly mortage payment then you may consider refinancing. You can even refiance into a lower term mortgage as the 15 year rate is at 3.875%.

If you are a believer in the dobule-dip recession that everyone thinks is coming, then you may decide to wait. Unfortuently you never know if they rates are going to go up or down. It may definetly be worth a discussion with your current lender or possibly shopping around for others.

Should You Refinance That Mortgage?

Many people are dropping everything to refinance their house since Mortgage rates have dropped again. The question is, should everyone jump on that bandwagon? Here are some things to think about…

You usually have to pay for an appraisal when you refinance. A lot of people are finding that when the appraisal comes back, their house has lost so much value that they don’t have enough equity to refinance. They then end up being out the cost of the appraisal which can range anywhere from $150-$400.

If you are wanting to refinance from a 30 year to a 15 year, remember the depending how many years you have been paying on that mortgage, moving to a 15 year most likely will require a higher monthly payment. My advice would be to keep the current mortgage, but just over pay it to effectively make it a 15 year. That way if you ever come across financial issues, you can revert back to the regular (lower) payment without being on the hook to the bank for a higher amount. Sure it is no longer going to get paid in 15 years, but there is that piece of financial security that is priceless.

As always, verify closing costs first and line that up with the number of years you think you are going to stay in the home. For example if closing costs are $6000 and you only plan on being there 5 more years, well that $6000 closing costs equate to $100 per month plus compounded interest over those 5 years, if your new payment after the refinance is not $100 less than your previous payment, there is no reason to finance since it won’t benefit you.

I always use a mortgage broker. I have used the same guy since I have bought my first home back in 1995. I use him since I always have a few things that I want when I refinance. My requirements are: No Escrow, No Prepayment Penalty.  When he does his rate search, he always finds me a lender at the lowest advertised rate with this conditions. He gets paid by the lender so I pay him nothing more than I would if I found the bank myself. I highly recommend you ask around for a reputable broker to help you in your search. In most cases states have increased laws to make sure they your interests are protected when using a broker.

These are just some things to think about before refinancing. Sure the lure or 4% mortgage rates is enticing, but you should always do your research to make sure that refianncing doesn’t cost you more that your current mortgage.

NCUA and FDIC Insurance Limits Now At $250,000

The limits on account balances that are insured have now been permanently set to $250,000. The limits were increased back in 2008 as a temporary measure due to the high bank failure rate. There was another temporary extension that was to put it to expire in 2013, but with the bill signed by congress yesterday, the insurance limits per account will stay at $250,000. So if you had a CD over $100,000 that was to mature after 2013, you no longer need to worry!

Here is the FDIC News Article if you care to read the details.

I imagine that most of you, including myself, didn’t have an issue with the $100,000 limit much less the increased $250,000 limit. But now I can dream that if I win $1,000,000 in the lottery, I only need to spread it across 4 different banks rather than 10. Here’s to still dreaming!!!!

Free Amazon Prime For Students

Amazon is offering their Amazon Prime Shipping service free to students for one year. For those of you unaware of what Amazon Prime is, it allows Unlimited FREE Two-Day shipping on items purchased from Amazon. There is no minimum order size. You can also upgrade to overnight shipping for $3.99 / item. This usually costs $79 a year and you can cancel it at any time if you are unsatisfied.

A few things to note, you must have an email address ending in “.edu” to qualify. Those email address are usually only given out to students, so one is required for this offer. Also, not all items qualify for the free 2 day shipping. I currently have the Amazon Prime service and in my experience usually the item needs to be sold my Amazon for it to qulify. Each item will tell you whether or not it is eligible for the Amazon Prime service. Note in the screenshot below:

This is a pretty good deal if you order a lot from amazon as it will increase your shipping speed, since in most cases the current free shipping can take up to 5 days to get to you. If you are interested in signing up, check out the details at the Amazon Prime For Students page.

Free 7-Eleven Slurpee on 7-11

How fitting that 7-Eleven is offering a free Slurpee on 7/11!!!  According to the Events Page on Slurpee.com, if you go into a participating 7-Eleven store on Sunday July 11th between 8am and 11pm, you can get a free Slurpee drink.

Unfortunately, the site doesn’t list which stores are participating, so if you have one near by, I would stop in to see if they are going to giving them away on Sunday. If you experiencing the heat wave as is most of the country, this will be a welcome freebie!

Mortgage Rates Still Dropping

I received a call from my mortgage broker last week telling me that rates had fallen quite a bit in the last week. I usually use Pentagon Federal Credit Unionas my basis, since they seem to have the lowest rates around. Well sure enough, to my surprise, a 30 year fixed rate mortgage has dropped to 4.5%. I guess I had to do a double take on that since this seems extremely low and I can’t remember a time when I saw a 30 year fixed rate at 4.5%.

My current mortgage rate is at 5.5%, which at the time (2 years ago) was a very good rate. I have decided to refinance to the 4.5% rate which will save me about $175 per month on my payment. Since I am refinancing over 30 years, I have decided to make payments using my current payment to help pay it down faster. I currently have a reward checking account at 5%. This is the first time ever that I have had a savings/checking account with a rate higher than my mortgage. I still need to see whether the advantage of paying down the mortgage is greater than just saving that extra money now. That is a post for another day!

I have a great mortgage broker where I all ever have to pay is for the appraisal and title costs which equates to around ~ $1000. If you refinance, that is one thing to keep any eye on. Some banks can try to charge you in upwards for $3000 for closing costs. My advice to you is to find a mortage broker and let him shop around for the best mortgage for you.

The 20 year and 15 year rates are around 4.25% and 4% respectively. If you are planning on staying in your current home for a while, you might think about refinancing at this point. Of course rates can still go lower, but they can also start going up.

If you want to crunch some numbers, try using the Bank Rate Mortgage Calculator. It lets you play around with the interest rate and payment amount to help you determine what best works for your situation.

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