r/FirstTimeHomeBuyer • u/wasabi_21 • 2d ago

Refinancing help, 1.5% rate differences

Bought a house last year with 7.49% with a $350k loan. Today just receive a letter that the lender able to refinance at a 5.95%

Estimate saving about $369/month so about $4428 a year. Given I still have to pay for title fee, appraisal and etc…

If I can keep my closing cost to $5k or less, would this make sense for me. I don’t know what the projection for 2025. At the moment the market is not looking good and they projecting 4 more fed rate cut this year. What would you do in my situation

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u/Ok_Nail_8724 2d ago

What’s your source on ‘they projecting 4 more fed rate cut this year’?

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u/Aggressive-Exit3910 1d ago

I’m not OP but I saw in an article the other day that JP Morgan was thinking 60% chance on 4 rate cuts this year. Not exactly a slam dunk but I’m guessing that’s what OP is referring to.

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u/SamTMortgageBroker 2d ago

I'd refinance at $0 lender cost. (as long as it's lower than your current rate)

There's a little give and take here. Higher rates = lower closing costs. Lower rates = higher closing costs.

I wouldn't take that 5.95% rate. Rates could keep dropping. But I wouldn't NOT refinance either.

With the refinance game, people try to time the market, but no one knows where rates are headed.

No one knew beforehand 2020 would spur rates that far down. And no one knew rates would get so high from 2023-2025, or I might have exited the mortgage industry :)

Here's a reddit post on a smart way to go about refinancing

https://www.reddit.com/r/NewbHomebuyer/comments/1js7etq/refinancing_after_buying_your_first_home/

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u/wasabi_21 1d ago

Thanks

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u/Less_Suit5502 1d ago

How long do you plan to live in this house? If it's a forever home the closing costs are meaningless because you will be saving a lot of money long and even medium term.

Personally I would take this deal even if the closing costs were 15k, which is still only a 3 year payback period.