[quote=walterwhite]Why is the conventional wisdom to only refi when rate is down 1 percent?[/quote]
Conventional wisdom (up until the bubble) was that there were transaction costs associated with the refi, so you needed a big enough drop to recoup your transactions costs. (doc fees, appraisals).
The other factor is that when you refi- you restart the term of the loan… And there are arguments against doing that for small rate changes.
But these days you can actually get cash paid to you if you have the sweet spot of good credit, big enough mortgage that the brokers commission is big… I’ve watched a few coworkers refi over the past few years – and the size of the mortgage determines the cost of the refi (including negative cost.) My mortgage is small enough there’s no free refi for me. A coworker is at the top end of conventional/conforming… he was paid a few hundred bucks at closing.
