another refinancing Q

we closed on our house in June 2010, at a 5% interest rate. I've seen rates dropping since, even below 4% (i saw last week in the paper that Bethpage FCU was offering a 3.85 rate I believe). I emailed the mortgage broker we had used when we closed on our house and he told me that it would not be worth it for us to refinance at this point as the closing cost, title fees, appraisal, etc would outweigh the benefits of refinancing. I don't know what to think though, and I'm not sure if i should just go to a random bank and ask... WWYD?

Re: another refinancing Q

Even tho we keep hearing about these rates, there is fine print we don't hear. I was about to re-fi to 4% then even tho i have excellent credit when they did the application they could give me 4.25% cause you need it over 740.
They appear to be advertising these rates but making it very difficult to actually refinance.

Message edited 10/12/2011 12:02:26 PM.

Re: another refinancing Q

I think the previous poster makes a VERY good point about rates. While interest rates are generally very low, there is not a one size fits all rate. Whether you are purchasing or refinancing, it all depends upon your personal circumstances and qualifications, and the type of loan.

Rates for FHA loans are generally lower than conventional mortgages (but often the mortgage insurance you'd pay with FHA makes it worth going conventional, if you can). Rates for 15 year fixed mortgages are lower than for 30 year. Rates are also dependent on your credit scores, debt-to-income ratio, down payment, etc.

Bottom line is - A lot of factors come into it, so you can't just look at a bank's lowest advertised rate and assume you can get it.

If you want to get a second opinion, you can always check with other lenders. It couldn't hurt. But I think you only want to consider refinancing if you have plans to stay in your house long-term, and if you will get an interest rate reduction of more than 1% point. And you definitely want to understand what the associated costs will be and how you can pay them (will you be able to roll them into your loan? and would it make sense to do that? or would you pay out of pocket?).