Refinancing… or Not

A month or so ago I stopped into the down­town Fifth Third to inquire about the pos­si­bil­i­ty of refi­nanc­ing my mort­gage. Now that rates have dropped I fig­ured it was a good time to test the waters. I was told that I’d have to pay into the mort­gage a bit more before I was eli­gi­ble, but that I’d get a call when it was time. A few weeks lat­er I get a call from a Fifth Third branch office about com­ing in to refi­nance my mort­gage. The per­son who called me proved impos­si­ble to meet with. We played phone tag for a bit, and when I final­ly sched­uled an appoint­ment, I showed up to dis­cov­er that she’d just sat down with some­one else, and could I please come back in an hour or so.

I end­ed up sched­ul­ing an appoint­ment with a fel­low down­town and met with him the oth­er day to final­ly talk about refi­nanc­ing. Turns out it is a $350 appli­ca­tion fee crap shoot. With the way hous­ing prices have tum­bled in Cleve­land, it could cost me sev­er­al thou­sand dol­lars, up front, to refi­nance. My house could be worth 20% less than what I paid for it. Zil­low esti­mates that my house is worth $7k less than what I paid for it, which would mean I would need to pay 5 or 6 grand to refi­nance to a low­er rate.

The upside to this is that it will take me a bit to save up that kind of cash, and in that time, rates might fall even fur­ther. The new mort­gage will like­ly have mort­gage insur­ance though, so fig­ur­ing out how much mon­ey I’m real­ly going to save in the long run is going to be quite complicated.