Some Can’t Refinance And Some Won’t

Those who want to refinance and can’t probably don’t want to hear this.  Just as the article points out there are many out who have rates in the 6 percents and just are not refinancing.  That isn’t just the article stating that, I have seen it.  I sometimes feel like I am twisting someone’s arm because I keep bothering them trying to get them to refinance.  Of course that is how I make money but I just don’t want to see anyone miss out on savings.  Here is a great breakeven tool from Bloomberg to see how long you need to keep your loan in order to recover the costs of refinancing http://www.bloomberg.com/invest/calculators/refinance.html

I always make sure to do a breakeven analysis for my clients manually.  Some think they won’t be in their home for long enough to recover the costs.  This is an assumption and also speculation.  In a market where we have no idea where home values are headed I would assume you will be in your home longer than you think.  You can also look at wrapping some or all of the closing costs into the interest rate.  That way there is no cost up front but you do get a monthly savings. 

There are many that are just underwater that cannot refinance.  There isn’t much that can be done here unless they increase the maximum loan to value on the Home Affordable Refinance, The Obama Refinance. 

http://online.wsj.com/article/SB20001424052748704358004575096020101445724.html#mod=todays_us_page_one