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Need Help - Refinance 7/1 ARM into 30 Year Fixed

We have a 7/1 ARM at 4.75% that will adjust in 5 years.  I contacted our lender, and we're elgible for the "Loan Modifcation Program".  We'll be able to get into a 30 year fixed and save approx $150 a month.  The refinance will cost about $3500.  We've lived in the house for 9 years, and have refinanced 4 times.  Our home is worth just about we owe.  Ideally, we would like to upgrade in two years, and keep this home as a rental property.  But, we don't know how that works - - having two mortgages in our names, and whether or not we'd even be approved for a second home.  My husband needs some convincing.  He thinks  we should wait and see if interest rates will drop.  I don't know how long the "Loan Modifcation Program" will be available?  Is now the time to refinance or should we wait?  Would it be worth to refinance now, and then end up selling the house since we can't get a second home?  Thank you in advance for your words of wisdom :)

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December 13 2009 - Corona
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Rudi made a great point.  If you know you are going to get out stay with what you have for now.

If you still want to pursue, find a good ca mortgage broker.

Good Luck and Merry Christmas
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December 14 2009
If you are fairly certain you will be moving in 2 to 5 years I would keep what you have. Your 4/75% 7/1 ARM will not adjust until the 8th year.

If you are not fairly certain, I would refinance Yesterday!

Rates are not going to get much better and they surely will rise after Q1 2010.

The Feds are not going to support the MBS market after that. Of course, as anything, this could also change. .... Best wishes.
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December 14 2009
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I don't mean to sound harsh, but your husband seems to be a bit greedy here.  The fact that there is a way to save money when you owe the same amount your house is worth, is a great deal.

On the other hand, it doesn't necessarily make sense to spend $3500 to save $150 a month.

As for buying another house in 2 years, I'm not sure why you would qualify or need a modification while thinking about buying another house...

If you qualify for a modification, it means you are having a tough time affording what you already have.  Please don't consider anything more than affording what you have.

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December 13 2009
 
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