If you’re going to be in the house for a long time, you might be better off paying the fees and possibly even points to buy the rate down even further. Of course, there’s nothing that says you can’t do another no-cost refinance in a year or two if rates continue to fall, but realize you’ll always be paying 1/8 to 1/2 a percent higher for your no-cost mortgage than a “market-rate” mortgage where you pay the fees.

You only need a score of 740 to get the best rates on mortgages. We were getting some sweet offers in the mail for credit card freebies a month or two ago (you know, $300 with your first purchase, or 25,000 miles to sign up with another 25,000 after putting $2K on the card) so we actually applied for 5 credit cards just two weeks before initiating our refinance. It dropped our score a little, down into the 770s, but that was still plenty high to refinance. We had to give a quick explanation and show a couple of statements, but no big deal. Now, I don’t recommend applying for credit cards the same month you try to get a mortgage, but if you pay your bills, your credit score will take care of itself. Lees verder →