Is it practical to refinance in a year?
Red C asked:
One of the lenders offered a loan for a house with high interest because of low score and adviced that we can refinance in a year with a lower interest rate. Is this true?
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One of the lenders offered a loan for a house with high interest because of low score and adviced that we can refinance in a year with a lower interest rate. Is this true?
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February 22nd, 2009 at 5:04 am
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Possible.
What makes it worthwhile is if you can do it without paying closing costs etc.
February 23rd, 2009 at 9:43 pm
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woot woot i got it
February 24th, 2009 at 10:08 am
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You can but it is going to cost you.
February 25th, 2009 at 5:47 pm
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I doubt it. Your credit will not improve much in a year. Also, you are going to have to pay a bunch of fees.
You should buy a house when you are ready - financially. That means your credit is in order, you have very few or no debts, and you have 10% to 20% to put down (plus closing costs).
Don;t buy a house if you are not ready, and don’t pay thousands of dollars extra because your credit is bad. That blessing of a new home will turn into a curse very quickly. Joy will turn to stress.
February 27th, 2009 at 9:20 pm
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You can refinance for a lower rate in a year IF your credit score goes up enough and interest rates stay low. I would say it’s a pretty risky proposition because you may end up with an unaffordable payment.
March 2nd, 2009 at 10:47 pm
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yes..but think..if you wait and pay a few more years you maybe able to refinance for even lower a rate. when your credit improves. if you do it now, you’ll probably have to pay loan fees and closing costs again! which would waste more money than you’d save in the long run.
March 5th, 2009 at 6:55 am
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you’ve asked two very different questions: is it practical, and is it possible? possibility depends on your credit score, payment history, etc. practicality depends on how long you’ll be in the house before selling. any savings you might gain from refinancing might be offset by the closing costs when you sell (primarily, commission paid to the real estate agent).
also the market has changed considerably recently. you might not quality for a lower-rate loan because lenders are a lot more conservative now. it would certainly be worth a try: there’s no cost to applying for a loan and you don’t have to sign anything unless it makes sense.
March 8th, 2009 at 6:48 am
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Do NOT do it! How do you know you will get accepted for a better loan in a year? It’s very risky. Are you absolutely positive you can keep up the high payments? If you get the chance to refinance the second set of closing costs will off set any short term savings. However if you cannot get a house any other way and are willing to take the closing costs hit AND will be staying in the house for another seven years at least then you will probably do all right. Find another lender, or wait and save up for a bigger down payment, or find a smaller house. If you get layed off can you still afford the payments? You are better off to get your CR score higher and have more control over your finances. There are a lot of predator lenders out there. Look how many houses are in foreclosure right now becayse of tricky lenders. Get a 30 yr fixed rate! Just be careful and keep asking and learning!