USDA refinancing?

[weathergirl77]

I closed this March on a condo and paid $73,440 on a 30 year fixed mortgage at 5.5%.  I am thinking if I should refinance in 3 years when a bankruptcy goes off my credit report and my score will be around 800 or more.  It is now 715 and I filed in 2003 and have never been late in any payments since then and even before the bankruptcy until my lawyer said I had to stop payments to the credit cards and then lates were reported before I could give them a case #.  That still angers me but that is a different story for a different time.

Does USDA do refinancing?  If they do is it only for 30 years?  Of course I would want to do this if the rates were low but I want to pay off the mortgage as soon as I can.  Also is the closing cost in refinancing as much as when you first buy a house?

I would appreciate any suggestions.  Thank you very much!

[ShanetheMortgageMan]

You can refinance into a USDA loan only if you have a USDA loan, 30-year fixed is the loan program.  I don't think there will be a ton of benefit to refinance as you'd only be dropping the rate by about .50%-.75%, saving you around $33/mo, closing costs for refinancing is pretty similar to when you buy the home... so figure at least $2k, it'd take you 5 years to break even on the costs.  For there to be a good benefit to refinance I recommend you break even in less than 36 months.

[weathergirl77]

Thank you Shane makes sense!  I will just add more to the principal every month to pay it down.  I wanted to thank you for originally introducing me to the USDA program last year when I started the mortgage process.  I am a very happy camper on how everything turned out!!

[ShanetheMortgageMan]

Welcome, glad you are happy.