cancel
Showing results for 
Search instead for 
Did you mean: 

Looking to refinance, FICO scores, and interest rate trends?

tag
Anonymous
Not applicable

Looking to refinance, FICO scores, and interest rate trends?

I will try to describe my situation as completely as I can:

 

Primary and only residence in NM.  Wife and I look to refinance.  Did so not that long ago and got 5% but rates have dropped markedly.  We are looking for lowest monthly payment.   Will to pay points if that makes sense.

 

 We are older and intend to stay here as long as possible.

 

Total mortgage plus cash out less than fifty percent of recent appraised value.

 

Income to debt payment ratio is adequate for me alone or the two of us together.  Tax plus homeowners lower than most places.

 

My wife and i have one late payment about 4 years, six months ago.  She has one a little more than a year old.

 

My middle FICO score is 715 Expirian.).  Wife's experian score  is 708. (The late payment hurts her only seven points with Experian?)

 

Experian tells me that my credit card debt is hurting me two ways..   High debt and and high ratio to limit.  I suspect that is a big hurt.

 

I have paid down credit card debt to zero on all cards.  I calculate that this will not show in my credit reports until about December  3-4-5. No installment debt. 

 

My only debt payments are now the mortgage. 

 

How long until it shows in my credit scores?  Two weeks more?  (wild-eyed guess)     Experian will notify me when the new balances show up in the reports.

 

What do I do?  Will the credit score boost make enough difference to justify waiting or going with rapidrescore?

 

What will mortgages interest rates do??  They are to track Treasuries and thus should be going down??  (Flight to US for safety with Europe shaky??)  Isa  possible drop in interest rates another reason to wait??

 

Any help would be appreciated.

 

 

Message 1 of 17
16 REPLIES 16
cdtotten
Established Contributor

Re: Looking to refinance, FICO scores, and interest rate trends?

I wouldn't expect the rates to go any lower then they are currently. They are better than ever and there is no reason to wait at this point. Are you FICO scores affecting your loan rate? If so, then yes waiting for the new balances to report will likely raise your score and could put you in a new interest rate bucket for a conventional loan.

 

Have you talked to a lender? I would let the new balances report, then apply and see what you can get. Good luck!


Starting Score: 627 EQ, 621 TU - 11/15/08
Current Score: 778 EQ, 781 TU, 778 EXP 07/20/12 Lender Pull
Goal Score: 800 EQ & TU


Take the FICO Fitness Challenge
Message 2 of 17
GregB
Valued Contributor

Re: Looking to refinance, FICO scores, and interest rate trends?

Where are you getting an EX FICO score? If you are using Experian then I am guessing you are getting their score, sometimes referred to as a Plus Score.

 

Message 3 of 17
Anonymous
Not applicable

Re: Looking to refinance, FICO scores, and interest rate trends?

To:  GregB

 

Thank you for asking because yes I went down that primrose path, tracking that Plus score, even achieving a 22 point increase.  But it was all irrelevant.  I finally discovered my FICO score and have been following it since -- and it is flat as a floor.

 

Worst thing -- USAA, which I trusted, sells the Plus scores and nowhere does it explain that it is (as far as I can see) the only lender that uses it.  I have challenged them on this and they deny everything.  

Message 4 of 17
Anonymous
Not applicable

Re: Looking to refinance, FICO scores, and interest rate trends?

To: cdtotten

 

In other words, you see no harm in waiting?   That could work for me.

 

Many thanks.

Message 5 of 17
cdtotten
Established Contributor

Re: Looking to refinance, FICO scores, and interest rate trends?

No, I see no harm in waiting. Interest rates aren't going anywhere for a while.


Starting Score: 627 EQ, 621 TU - 11/15/08
Current Score: 778 EQ, 781 TU, 778 EXP 07/20/12 Lender Pull
Goal Score: 800 EQ & TU


Take the FICO Fitness Challenge
Message 6 of 17
Anonymous
Not applicable

Re: Looking to refinance, FICO scores, and interest rate trends?

Thanks again, cdtotten,

 

I was wrong in (at least) one estimate.  A major bank produced the latest statement balance on Nov 10 and Experian reported the new statement balance Nov 11.  The other two have not yet reported the new balance..

 

I still don't how long it takes for this to be reflected in the score.  Unfortuneately, this one account is so small that it might be inconsequential.

Message 7 of 17
IOBA
Senior Contributor

Re: Looking to refinance, FICO scores, and interest rate trends?

The rule of thumb is to loose 2 points on your interest to make it worthwhile to refinance.   So if you are 5%, you should drop to 3%.

 

At what point would you break even on the refi to include closing costs?  Would you be refinancing for another 30 yr loan?  Can you comfortably afford your current pymt?

 

If you have money in the bank right  now to pay for a refi closing and points, why not apply it to your loan and pay your loan off sooner?

 

Great job on getting the other debt paid off!!   You could easily (?) apply those payments to  your current mortgage and pay it off even faster!

Message 8 of 17
Anonymous
Not applicable

Re: Looking to refinance, FICO scores, and interest rate trends?

To IOBA

 

You have given me a lot to think about.  Thank you.

 

But one way in which my wife and I may be atypical:

 

We intend to die in this house and we just don't care how big a mortgage is left.  Our middle-aged, more successful than us children get the house and the debt on it will be no big deal to them.  So we want to minimize upfront costs and minimize monthly payment.  That's it.  We may be atypical but that's the way we are.  

 

I'll have to think about this -- and any more feedback from you is welcomed.   But I think that the 2% reduction in mortgage interest rule of thumb doesn't apply to us,. Again thank you and I'll have to think about everything you said.

 

(I hope that we don't sound like monsters.  But in all honesty, w't e scrimped to give our children the best opportunities.  They took those opportunities and ran with them and don't need any monetary help from us.)

Message 9 of 17
incognitony
Frequent Contributor

Re: Looking to refinance, FICO scores, and interest rate trends?

Its been my experience that credit cards report the new balance when the new statement is cut. It may take a few days to update on the credit reports after that. The scores probably won't go up more than a few points until at least 2 or possibly all report.

 

Sounds like you did a good job getting your kids off the payroll.

Message 10 of 17
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.