Chances are you could re-finance at a lower interest rate for only 25 years and pay the same if not less a month.

I'm 3 years into a fixed 30 year at 7.5%. I called my mortgage broker last night and started things rolling on the re-finance.

I will pay it off long before, I'm shopping the rate/monthly more than anything. A bi-monthly that's an auto-debit will give me the better rate.

You could take the 30 year loan, but do a simple calculation to pay a bit more and have it paid off in 28. Or, if you are more debt-averse, keep your payments the same as they are now, and pay it off years earlier than you had planned.

Many folks (like Ric Edelman) advise keeping your home indebtedness as high as possible, and invest in the stock market instead to get some real growth of your money.

Definately. I like the bi-monthly but I refuse to pay the bank for giving me that "convenience" to convert it now. I'm going to try and make it happen up front this time so I don't get hit with that re-structuring fee crap.

As long as we're giving financial advice, I am still stuck in an apartment. If I want to get a $150K house, how much do I need down/what would my payments be? The rates are so low now, I'm tempted to stop saving for a down payment and just jump in the water. But I'm nervous.
RD

Don't forget to compare with a home equity line of credit if you need cash out. I have seen HELOC rates as low as 4 percent with no closing costs. If you combine that with your existing first mortgage your effective rate may be less than the going 30-year fixed rate. If you just want to lower your interest payments then you should refinance, but wait a few days to see what long term rates do. They don't always drop when the Fed cuts rates, although they should be going down now.

I have a question for all you experienced homeowner-types. My husband and I are ready to invest in our first house. We've been looking for about a year; I'm really getting sick of renting. He wants to wait for about two-three more months; he's convinced that the uncertainty in the market will yield a more favorable environment for buyers, and thinks that in two - three months there's going to be several cheap houses for sale. What do ya'll think? Thanks for any input.

The bi-monthly plan will in an of itself reduce the 30 year by almost 6 years.

You'll "need" 5% down to jump in right now but that won't get you out of PMI. You have to carry PMI(property mortgage insurance) until you've got 20% equity in the home. It's total bs but legal.

Go to www.google.com and do a search on "Mortgage calculators". You can enter all sorts of variables depending on what one you use but do not forget to build in property taxes.

Value of real estate has been solid. You are going to have to be concerned about what happens to the lending companies when business becomes scarce.

BUMP

and (IMHO) with housing starts down and lower interest rates more people are going to be wading into the first time homebuyer waters.

Less homes available and more people looking to buy will keep prices stable.

You can actually get into a house for substantially less than a 20% down payment if you have an outstanding debt/income ratio. We bought our first home with a 5% down payment, the balance being a 30-year fixed at 7.15%. You may also want to consider land contracts, which can get you into a home quickly. If you have good credit, you can generally refinance a land contract into a traditional mortgage after 12 months of residence, no matter what your equity is.

Run through a cost/benefit analysis with your mtg. officer. Rule of thumb, if you plan on staying in your house for at least 3-5 years, it is a good idea. Otherwise the closing costs eat up your interest savings.

Regards, Republic of Texas aka, Dave the Realtor

Don't get penny-wise and pound-foolish. Your home, first and foremost, should make you happy. If it makes money too, that's nice but not the point. There are plenty of other ways to invest.

Decide how much you can afford (taking care to keep up your savings/investment program), get pre-approved, and start looking at houses. Look until you have a good handle on the market. Then buy.

Check around, especially online. We just applied for a 15 yr., 6-1/2% , no points, no closing costs refinance. The rates have come down in the last couple of days, but on some lower rates you'll have points, etc.

Am not a finance person, but I would think you could go at least as low as 5%, and it seems I've heard there are even nothing down loans. Of course then you have to pay exra per month in PMI (private mortgate insurance) since the bank has no collateral. But if I were I would definitely go for it now. Just an opinion. There's nothing like owning your own four walls.

I think that the interest rates are going to stay low for a while and therefore, it will be a buyers' market. If you find the house you like, buy it and don't look back.

Home prices are very market dependent. For example, my guess is that housing prices in Orlando are probably dropping like a rock. Lots of people in the tourism industry are getting laid off. But housing prices in the D.C. area, where I live, will probably (hopefully) stay pretty stable. Government workers are still working and there will probably be more added to the ranks.

There, you have my two cents.