Can anyone explain or point my in the right direction of how refinancing works? My DH and I just bought our first house last May, fixed 30 yr at 7%. We bought our house with absolutely no money, so I wasn't too upset about the interest rate. But I would love to take advantage of falling rates. Appreciate any help.

__________________
Soon to be married and learning to stretch a dollar!

Contact your mortgage company and ask them about it. They will be able to tell you the lowest rate you can get at the moment and also give you an estimate of your monthly payment. Have them explain everything to you, how much refinancing would cost you, if it's really worth at the moment, should you wait longer...

I don't know the first thing about finances and mortgages and that's what we did. Our mortage company was really nice and helpful about it. Don't worry, there are no stupid questions, just stupid answers.
Good luck!

__________________

Contact different banks and your mortgage broker and compare rates. Don't forget to compare fees as well. Some charge a lot more than others. At 7%, if you can lock in a new rate at 5% or even a little higher, you would still save a lot of money if you are planning to be in the house long term.

You will have to pay closing costs again (attorney, title search, appraisal), that's why you wouldn't refi if you are planning to move in a year or two, and most people advise to only refi for a full percentage point or more less.

Our mortgage broker is watching rates for us and will lock them in when they get low enough. I've had many bank lenders pretend they can't do this ("can't keep track, you call me"), but it's better to find someone who can and will, I think.

Don't ask me why, but we didn't have to pay closing costs again when we refinanced. The fees we had to pay were pretty small, a lot less than what I expected.

__________________