Is now the best time to refinance your mortgage? Will a job layoff kill any hope of getting a new home loan? Can you challenge the results of a low appraisal?

Bankrate senior mortgage reporter Holden Lewis answered these questions and others during a recent online chat with Following are a few highlights from a transcript of that chat:

Should I refinance now or wait?

I have a jumbo mortgage with three years remaining on a rate that is fixed for 10 years, with another 20 years remaining on the loan after that. It is a relatively low rate for now. Is it better to ride it out for the next three years and then see what is available? Or, should I refinance now for 20-25 years?
— dp1962

The answer depends upon where mortgage rates will be in three years. We have no idea what will happen.

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It sounds like you plan to live in the house for a long time. Because you’re asking this question, I’m guessing that this is a stressful situation for you. Maybe it’s not keeping you up at night now, but maybe it will in a couple of years.

So think of refinancing now as a way to safeguard your peace of mind. Is the financial cost worth the psychic gain? That’s not a rhetorical question. Remember that this isn’t only a dollars-and-cents issue, it’s also an issue of emotional maintenance. If refinancing now leads to less stress in the future, then maybe it’s worth it.

I know Type A people who would ride that 10-year period to the end because they would get stressed out knowing that they had “wimped out” and sought the safety of a 20-year, fixed-rate refi at today’s low rates. But I’m not a Type A and maybe you’re not, either. For folks like me, peace of mind is worth money.

Will unemployment sink my mortgage hopes?

I would love to refi now but I am unemployed. Our loan-to-value ratio is small and I have cash reserves. Is my current mortgage company my best bet?
— Pete

Inquire with the current lender. However, the lender probably is going to tell you that it can’t underwrite a new loan until you have sufficient income — and unemployment insurance probably isn’t sufficient to qualify for a mortgage.

Can I challenge appraisal results?

I bought my house in July 2009 for $285,000 with an interest rate of 5.4 percent. I tried to refinance with the low rates being offered and the appraisal came in at $263,000. Is there anything I can do to challenge the assessment value?
— Andy

I’ll assume that you owe roughly what the house is worth now. You might try applying with your current lender for a refinance through the Home Affordable Refinance Program. HARP refis are for people who are current on their mortgages and who owe between 80 percent and 125 percent of the home’s currently appraised value. Ask specifically what you need to do to apply for a HARP refinance.

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What if that doesn’t work? If you asked the lender to challenge the appraisal and you didn’t get what you want, then the next step would be to apply for a refi elsewhere. But you would have to pay for another appraisal, and there’s a good chance that the appraisal would be too low again.

If you decide to apply for a refinance at another lender, explain to the loan officer what happened to your first refi attempt. If the loan officer tries to dissuade you, that’s a good sign that a refinance isn’t in the cards right now.

Will the new FHA refi program help me?

What refinance options do non-FHA mortgage holders in good standing have if their property has negative equity?
— Evan

The Federal Housing Administration, or FHA, is rolling out a new refi program for people who have non-FHA insured loans, are current on their loans, are underwater and want to refi. The lender has to forgive at least 10 percent of the debt, enough to allow the homeowner to refinance and get an FHA loan at a maximum of 97.75 percent loan to value.

There’s also the HARP refi program. HARP never really caught on, and I doubt the new FHA refi program will, either. But a few people will get those loans. Might as well be you, right?

Will I get stuck paying PMI on a refi?

I was recently (formerly) working with a broker who told me that because my home’s appraisal isn’t what it used to be (and therefore I no longer had the equity I once had), I would be stuck with private mortgage insurance on any refinancing I did. Is that true or are there other options?
— Guest 2

Unfortunately, the broker was telling the truth.

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