What is the minimum i should look for in an interest rate drop if i refinance my house?

Denise
i currently have a 30 year fixed at 6%. i want to refi before the rates start going back up. i have seen 5% with no points...4.65 with 2 points...etc..i'm still looking. we are planning to be in the house for many years, what is the minimum rate decrease i should get if i can't get into the low 4's? is going from a 6 to 5% even worth it? will most banks roll the points into the mortgage if you don't have the money on hands? we currently owe 310, 000 on the house and now it's only worth 283, 000. will this automatically disqualify us from refinancing?

Hector
Right now the lowest mortgage rates available are about 5.1% with no points. It changes a bit daily You need to figure out how many years it will take you to recover all of the closing costs at 5% compared to continuing to pay your 6%. Negative equity will not automatically disqualify you if you have good credit but I doubt you will get anything close to 5%. In fact I doubt that you could get better than your present 6%. Fill out some applications and see what they say. Paying one point on a 200, 000 mortgage means you're getting a 200, 000 mortgage but you're only receiving 198, 000, so what is the true interest rate. Paying points doesn't lower your APR which is what you should be comparing.

Chae
you will NOT be allowed to refinance if you have negative equity - you would have to come up with 27, 000 in cash at least to pay off the old mortgage and you may actually only be allowed to refi 80% of the value, which would require another 60k in cashif you are planning on staying for awhile, you are stuck where you're at until house prices increase enough where you have some actual equity again - millions of homeowners are in the same position, including me

Ashlyn
You can't refinance if you are upside down. Count yourself lucky that you are in such a good rate. 6% is not bad at all. Give up on refinancing, and focus on trimming your bills in other areas to try to get monthly savings.

Babara
I deal with this everyday. Please give me a call or email me. We help reduce your principal down to what the actual value is and could also reduce your rate.