Should I refinance?

[Jackson Carr]

Hey all, So my situation is I am in a 5/1 Arm at 2.75%. My family friend mortgage broker said he can get me a 30year fixed at 4% or so and 80% LTV and my payments would come out the same. He also mentioned he would pay refinance fees out of pocket. Is there any downside to this? Thanks, Jack

[Charlie Fitzgerald]

When does your 5/1 arm reset?  Your broker friend is not paying for your costs out of his pocket.  He's paying them with lender credit which is generated by giving you a higher rate than you qualify for.  Ask him what the lowest rate at par he can give you is.  Also, ask him what the discount points are to buy the rate down even lower?  Provide this information and I'll gladly tell you which is the way to go.