No Refi for Me

When I finally convinced my husband that we should refinance the house rates were around 4.75. The plan was to reduce our monthly payment but keep paying the same amount, cutting years off of our mortgage.

The problem is the declining home values in our neighborhood. When we bought we knew that prices would continue to fall, possibly for a year or two. Based on our 5-15 year timeline we were ok with that. What we didn't anticipate was the dramatic drop in interest rates this year. We put down 10% when we purchased and have since paid $1,000-2,000 in principal (10 mortgage payments).

When we started refinancing all of the banks we looked into required 10% equity. The Making Home Affordable Act reduces the equity requirement, allowing up to 105% equity. I started calling about this option in late April. A plan wasn't in place until 1.5 weeks ago when the rates had crept into the upper 5's.

I called in and had a loan guy run the numbers last week. The estimated savings were under $100 a month. So for now we've decided that the expense of refinancing isn't worth what it will cost us to do so.

We'll be keeping an eye on rates in case they go back down but we're not holding our breath.