Refinancing A Construction Loan
This is an article that ran back in 2008, it’s interesting to see what the refinance rates were back then compared to today.
Construction Loan Refinancing
We built our new home several years ago with a construction loan that converted to an adjustable rate loan at the end of construction. The loan had a fixed rate of 5.875% for seven years then would have adjusted based on current interest rates. So we had several years of fixed rate before things could drastically change.
Converting To A Fixed Rate Loan
Needless to say were a bit nervous with the current financial situation in this Country. However, it appears that good news is here at the moment when it comes to interest rates for people with good credit and a sizable amount of equity in their homes.
Yesterday a local mortgage broker called me and let me know he can get me a 5.125% 30 year fixed mortgage with 0 points! I’m certainly very interested in exploring this refinancing option in the coming days. Obviously I want to see if there are better rates available and find out what kind of closing costs are involved. However, in my situation with an adjustable rate mortgage looming over my head I’ll certainly pursue this more aggressively than I would if I were currently in a fixed rate mortgage.
Being able to move into a long term fixed rate mortgage would certainly give me some peace of mind with my families financial future and certainly reduce our current payments. I’ll keep you posted on this if we decide to continue the process of refinancing our construction loan.
In the spring of 2009 we eventually refinanced our construction loan with a fixed rate, 4.875% 30 year mortgage.
Now is certainly a good time to refinance that loan. ARMs are good when fixed rates are high, but with 30 year conformings coming in around 5%, it makes good financial sense to refinance. It might take some time to recoup your closing costs, but it might be worth it for the peace of mind a low fixed rate can bring. Well, that’s my 2 cents anyway.
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