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.