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Chris Farrell Feb 14, 2009

Question: Today Friday the 13th, we signed refinancing papers for a 4.75% fixed 15-year mortgage. We had 6.0% 30-year fixed so this is a good deal for us. My first question. Will the “soon to be approved” stimulus packet have 4-4.5% refinancing available for those with good credit, as it was talked about last week? I have not heard anything this week about loan financing rates in the agreed upon plan.

If the lower refinancing rate will be available soon, it is worth it for us to decline the loan (within our 72 hours window) and take a chance on being able to get the lower rate loan in the near future. Or is the proverbial bird in the hand what we should hold on to at this point. Bryan, Ellicott City, MD

Answer: The fiscal stimulus package doesn’t have anything to do with bringing down mortgage interest rates. The Treasury’s proposed bank bail out plan does have the Federal Reserve buying securities in the market to bring down interest rates. (Don’t worry; we’re all confused about what is what these days)

No one really knows whether the Treasury and the Fed will succeed at lowering rates and, if so, by how much. So, the question is whether it’s worth it to you to see if rates fall much farther and, if they don’t, that it’s a risk you’re willing to take. My sense is that you got the mortgage and rate you want, and the cost/benefit trade-off for waiting isn’t worth it.

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