It depends on how long you're going to stay in your existing house. If you're moving soon, you wouldn't be around long enough to reap the benefits.

When you're calling around for rates, you may want to ask for a quote on a no points- no closing cost loan. These will generally be a bit higher than the regular rate, but you'll probably still save money and wont have to worry about a pay back period.

Be careful not to extend the term of the loan (unless you need to ). If you have 20 years left on your mortgage and refinance for 30 years, your monthly payments will go way down, but you'll pay more interest over the loan term - even with a lower rate.
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I would definately use the calculator @robbrown supplied.

1. Use the calculator on the exact amount you owe and the at the new rate you are being offered. 1% at 30 years on 250k = 50k +/- 3k.

2. There is a big push by most banks going on right now to attract new customers with good credit. PNC offers this same rate but if you apply and recieve a checking account with them and have direct deposit they will wave all closing costs on new mortages. I know this is being used by quite a few banks right now.

3. Read all the fine print!!! Banks that are offering fixed rates at prime or prime +1,ie. 4 1/2 % is kind of trickey because the fixed rate is prime or prime +1, who knows what prime will be in 2020? The term fixed rate has diffrent meanings, ie; fixed at prime? Make sure there is a cap and it is really a fixed rate.

4. A good rule of thumb is gather all the information from the bank and then before you decide go to a trustworthy account and spend the 200 bucks or so and have them review it for you. They can fill in all the details you will need and the exact figures of your savings or loss. Sometimes a lower rate sounds good in the beginning but it dosen't work out that way later on.

A trustworthy account is worth his weight in gold on decisions like this, most people do not use one or even think about them when applying for a mortage.

I hope this helps.
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Hmm...

I think this is about as good a time as you're going to see for a very long time.

Interest rates are at rock bottom, so the instant any sort of economic recovery starts to show itself, interest rates are going to start creeping up again.
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A 6% fixed rate is infinitely better than an ARM with an initial rate of 4.75%. You may need to talk to your friend to get more details about the terms of his loan, before salivating over "greener grass." How much was his down payment, compared to yours? What is the term of his loan, compared to yours? What is his APR, compared to yours?

Per Bankrate.com, "the annual percentage rate (APR) of a mortgage is calculated by taking the average compound interest rate – including the interest, mortgage insurance and certain closing costs, with points paid at closing – over the term of the loan. The APR gives a true picture of the cost of financing. The APR on adjustable-rate mortgages is a projection of the true cost of the loan."

Have you already talked to your current lender about reducing your rate? Save yourself the hassle and costs of refinancing if you don't have to. Even a quarter or half point can make a huge difference over the term of the loan.

This whole discussion may be moot if your house is underwater (having a market value lower than the amount you owe). Before approaching another lender, you might want to consult a Realtor regarding the comparables in your area.

In any case, if you use the calculator on Bankrate.com, you may be able to quote those rates if they're lower than the lenders' rates as posted on their own websites (see the bottom of page at the link provided). Also, check the definitions tab to get more clarifications on certain terms.

Respectfully,
Shin
Source(s):
bankrate.com's mortgage calculator
http://www.bankrate.com/funnel/mortgages/mortgage-results.aspx?market=551&a...

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FTC’s Home Equity Loan – borrower beware ! has some advices on home equity scams. Some “dos” and “don’ts”

Making Home Affordable website is useful.
The website also shows way to contact a HUD-approved housing counselor.

You can check Eligibility for “home affordable refinancing” and “home affordable modification”. Its resources for borrower page has news, info, calculators etc..

Hope for Homeowners plan has information on loan modification (renegotiates your mortgage with your lender).

Hope this helps.
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