Time to refi or wait a bit longer

[Matthew Sichel]

Hey,

Looking for alittle advice on my situation. Me and my fiance purchased a 2 family house last November using an FHA. Purchase price of the home was 699k and we put down 10%. Interest rate on the loan is 7.25. (We bought pretty much at the peak of rates). My lender called me this week saying FHA rates have plummeted and can lock me in at 5.6 if I refied. This was my intention all along however I was hoping to wait it out a bit thinking we'll see low 5s or high 4s very soon. I don't think I want to do this twice as closing costs seem like there going to be around 25-30k. Everything I've read says that anything over 1% difference on a refi makes it worth it. What would you guys do?

Also I made a considerable amount of updates to the houses (it’s two houses on one lot kinda property). There is a chance that it will appraise high enough to where I can refi to a conventional without any pmi. The only think is conventional would be low 6s right now according to my lender and we would have to see what works out better if that is the case.

[Greg Scott]

Here is what I've learned following interest rates for a long time...

If you listen carefully to the experts, they are wrong 50% of the time.  Rates might go down or they might go up.  The Fed only controls short-term interest rates, and mortgages are based on longer-term rates which are largely at the whim of the market.

So, if a refi makes sense today, I would refi today.  If it doesn't make sense, and you have no pressing need to get out of your existing loan, then I would wait.