After thinking long and hard, I finally took the plunge to refinance my home. I bought my home back in May of 2005. At that time, I was able to obtain a Conventional loan at the fantastic (at the time) interest rate of 6.25%. I felt I was getting a good deal. Again, at the time, that was a good interest rate on a home loan. But, my present loan provider (Wells Fargo) constantly forces me to pay an escrow shortage each January. They constantly screw up my account. Wells Fargo didn't even have me paying my mortgage statement in September!!! They threatened to foreclose (even though I have never missed a payment). I had to produce the check copy and get an attorney to set things straight with Wells Fargo. So, that was the final straw that got me to think of refinancing. I should have done it earlier. But, the rates would not be as low as they are now.
I got an interest rate of 3.51% from my new loan provider. I now will save approximately $300.00 a month. I got the VA to refinance my loan this time rather than go through the conventional loan or FHA loan process. The closing costs were exorbitant with FHA and Conventional loans. That is one reason I have not refinanced until now. With the VA, I have to pay a processing fee that is rolled into the loan (about $2.5K). I also had to pay for an appraisal which was $425.00. So, all in all, it has been rather painless. Should I have waited to see if interest rates go down even more? Maybe. But, I was ready to take advantage of the new rate. No one knows what the future holds. I was told by one mortgage broker that if President Obama is reelected, housing sales will continue to be depressed. Thus, he says, interest rates will continue to drop. But, on the other hand, if Mitt Romney is elected as President, then rates will surely go up as housing sales will increase. I don't understand all of it or even pretend to understand. I'm glad for two things; I am saving around $300 a month and I no longer have to deal with Wells Fargo.