Does refinancing make sense for us?

We just bought out house in August 2008 and have made just 3 payments. 30 year fixed at 6.0%. We paid about $2000 worth in points to get that rate. The house cost $180,000 and we put $55,000 down and mortgaged $125,000. We have very good credit (both just over 800), no student loans, one car payment and about $3200 in credit card debt due to our moving this summer (normally we have very little to zero credit card debt). I hope to pay off most if not all of our credit card debt with tax refund this spring. Our annual income is about $70,000.

I see rates are now about 5% and I heard they could go even a little lower. Would it make sense for us to even consider refinancing so soon after buying our house? Thanks.

(We live in upstate New York if that matters.)

What really matters is how long you plan on keeping your home. Refinancing costs money. If you plan on staying in the home long enough for the monthly savings to make up for the cost of refinancing then you should go ahead and do it. You should calculate your savings per month. Divide the cost of the refi by the savingsand that will tell yo9u the payoff period. Then make sure that you will live in the home at least that long. If you will, go for it. If not, better to hold off.

Joe

I'm sure you may be tied in with a redemption penalty during the initial fixed period. Perhaps you can find this out, but typically, you would have a reducing rate over say 3-5 years starting at maybe 5% of the mortgaged sum. Actually, the deal doesn't look that bad. At least you know how much you're paying out and I would like to bet that rates will increase over the next couple of years making it more difficult to get longer term fixed rate deals. Basically, you need to weigh up the pros and cons...

As a prudent guy, I would advise not. Try to have a good savings, now that you have a home and it's only less than 1 year.