7.125% interest rate on a conventional investor loan: When should I try to refi

[Connor Castillo]

Hi all,

With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

Thanks!

[Matthew Crivelli]

It's difficult trying to predict where the rates will go. Right now our rental loans are in the mid 6% range without a buydown. Floor rate is currently 5.25% with a large buydown. 

[Robin Simon]

Quote from @Connor Castillo:

Hi all,

With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

Thanks!

 From a rate perspective, likely is not close to making sense at the moment, would need rates to drop further, however if value has increased and you are looking for cash-out, that motivation (any lower rate as icing on the cake / secondary concern) it could make sense to look into

[Eric Veronica]

Much of that depends on your loan size.  If your loan amount if 700k then a rate decrase of .50% - .625% often times makes sense.  

If you are looking at a loan amount of 100k then I wouldn't recommend refinancing unless you are shaving at LEAST a full percent off the loan and likely that wouldnt even be enough.  

Another big factor is which state the property is located.  Refinancing a home in Florida will typically cost 2x-4x more in fees than a property in Indiana.  

[Andrew Zamboroski]

Quote from @Connor Castillo:

Hi all,

With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

Thanks!

Whenever to costs of a new mortgage are outweighed by a lower rate (assuming that is the only factor you’re considering) is a good basis.

[Melvin List]

@Connor Castillo I would reach out to a broker that is willing to charge you a flat fee and find you the best rate on the rate sheet. Depending on serveral factors you could be in the high 5's.

[Ko Kashiwagi]

Hi Connor,

At 7.125%, it probably wouldn't make much sense to refi now even if you can get in the mid 6's. It's really hard to say how rates swing in the short run, but the expectation is that rates will come down. Since I presume you don't have a PPP, it's likely a good option to refi as soon as the deal makes sense number wise, potentially in the high 5's.