I think you need to analyze the 10 year treasury yield to determine how much more “upside” you have on the possibility of mortgage rates falling. I am not an expert on the bond market but I do know we are at a pretty critical level with the 10 year… why the bond market has been rallying, I have no idea.
I have been advising people though that if they are going to ride out the storm for the next several years regarding holding real estate instead of dumping it, then absolutely considering refinancing now is advisable. I do not see how things will be any better a year from now. Similarly if we are trying to look down the road many years from now not only will rates be higher but property values will be much lower.
Some people who have more insight into the bond market that I have talked to see it bottoming out later into January but even they have reservations based on the overall sketchiness of the markets.
With your downpayment saved up you have done great. I think buying in winter of 08 may be a bit early but it beats buying in winter of 07.
I know Lucera very well and I think it will continue to depreciate. Your bottom level estimation of 180-200 with a possibility of an overshoot is accurate. One thing you may want to do is to check to see that if you do refinance and end up holding onto the property and convert it to a rental after you move out, what kind of cash flow will you get. You absolutely will enjoy tax benefits but you may not get a positive cash flow.
The final question is what sort of loan do you have now? By refinancing how much will you save? Anyways, refinancing may not be a bad idea if you are going to hold onto the property for awhile. Otherwise, cut and run and dump the property now… As for refinancing now verses in a year from now, I would do it now. As for refinancing now verses say 2 months from now… well analyze the 10 year treasury yield and try to figure out if it is trending down or up.
Also as posted above not sure if the numbers add up if your payment is 800 based on a 200k loan. Unless it is a teaser rate.
