To refinance or not to refinance. That is the question.

Rates for 30 year fixed mortgages are hitting historic lows right now. A sample of some of the current rates (as of 1/8/09) offered:

US Bank quoted 4.875% with 0 points
4.750% at Wells Fargo's rate page but they don't show points. I dug deeper and requested a rate quote and got a result of 5.5% with 0.125 points
4.6% to 5.8% at Amerisave
My local credit union is quoting 5.0% with 0 fee, 4.675% with 1 point and 4.5% with 1.5 points.
Wamu quotes 5.0% but that had points, I checked for 0 points and its 5.125%

So thats a variety of sources for rates in the 4.6-5.5% range and a couple banks that have 4.875%-5.0% loans with no points. Keep in mind that rates are changing daily and will vary based on the exact situation so you should check current rates in your area.

With such great rates, is now the time to refinance? The short answer to whether or not you should refinance is always going to be : it depends.

First lets start with some basic questions to ask yourself:

1. Do you have equity in the home? If your home is under water, where the home is worth less than the mortgage, then you are unlikely to be able to refinance unless you can add equity out of pocket.

2. Do you plan on staying in the home? If you only expect to be in a home for a couple years then it rarely ever makes sense to refinance. I wouldn't consider refinancing unless you expect to be in a home for several years.

3. Can you get 1% or more off your rate? If you can lower your rates by at least 1% then it may make sense to refinance. But if you won't get 1% or more to refinance then it is probably not going to be worth it.

If you have some equity in the home, plan on staying and are paying 6% or more right now then it could make sense for you to refinance.

To get a solid answer on whether or not it would pay in the long run to refinance you should compare the specific numbers for your situation to figure out exactly how much you'll end up saving. It is easiest to do that yourself by using an online calculator to compare your current loan with new refinance terms. Try this refinance calculator from BankRate. Or this calculator at Dinkytown.

Remember when comparing loan rates that the amount of points, discount fees and closing costs have a big factor too. So keep all the expenses in mind when comparing loans and don't just look at the interest % rates. Also make sure to consider that if you refinance a loan that it will normally mean you'll be paying the loan for more years.

With today's great rates on mortgages it is possible for a lot of people to save a lot of money on interest. But before you rush into a refinance make sure to look at all the details of the loan and do a comparison to make sure it will pay off for you in the long run.

BMG Music club no longer taking new members and new YourMusic club

If you go to the BMG Music club website you will be presented with a notice that they are no longer taking new members and a link about their other music club YourMusic.com

I always thought that the 7 CD's for 1¢ promotions from BMG were a great deal. It is too bad that BMG is not taking new members.

The landing page for BMG has an ad for the YourMusic club and says that "All CD's are one low price, you get a FREE CD when you subscribe and shipping is always FREE!" That seemed like a compelling deal so I took a look at their site. They do offer a low price of $6.99 per CD with free shipping. Thats about equivalent to the sale prices you'd get off BMG. BUT .. heres the catch: With the YourMusic club they automatically send you a CD each month out of a queue you setup. So it is more like a CD of the month club. If you buy a decent amount of CDs then YourMusic could be a good deal. You can also buy additional CDs for the same $6.99 total price.

Overall YourMusic seems like a pretty good deal. But it would only work out well if you buy a lot of CDs and really want to get at least 1 CD per month.

Some other cheap alternatives for buying CDs / music:

* Buy digital MP3 downloads from retailers like Amazon.com or Apples iTunes. Generally about 80¢ - $1 per track or full albums for $5-10 range. Digital downloads are great for individual tracks and very convenient. But you don't get a physical CD and have to use your own media if you want to burn a CD. There can also be license restrictions on some digital files.

* Buy used CDs at music stores or via sites such as eBay. You can find good deals and theres a wide selection. Prices will vary a lot but you can find some bargains. Usually used CDs are as good as new but you have to be careful to look for damage on the disc.

Best of Blog posts for the week January 9th

JD at Get Rich Slowly points out a limited time offer to get a Free Downloadable Suze Orman Book from Oprah, offer expires Jan. 15th.

Are You Maximizing Netflix? points to the service called FeedFlix that will analyze your Netflix usage. This one is from Jim at Blueprint for Financial Prosperity.

I love fancy economic graphs and charts and historic data. This week The Digerati Life looks at the economy with : Studying Business Cycles: Economic Graphs of The Current Economic Cycle and some awesome graphs by an analyst of International Economics, Paul Swartz. The graphs show how the current economic trends around our current recession compare to other recession cycles on average. In a lot of ways the recession is typical thus far but in other ways its unprecedented.

Trent at The Simple Dollar talks asks Do Children Really Cause Financial Burdens? Like I've concluded in the past, Trent feels the reports citing the lifetime cost of a child as over $200k are inflated.

Updown performance: down 12%

My Updown account has rebounded a lot in the past month. Last time I discussed my results I was down 30% overall. Right now I'm down 12%. By comparison the S&P 500 is down about 32% in the same time period, the Dow Jones is down about 30% and the NASDAQ is off about 28%. I'm doing 16-20% better than the major stock indexes.

I bought some shares of MGM Mirage (MGM) at about $11 and it quickly spiked to $14. When I bought it I set a limit order to automatically sell it when it hit $14. So I was able to cash in a quick profit on this one due to a short term increase in price. That one trade has netted me about $7k so thats a 0.7% increase in the total $1M portfolio.

My REIT investments have improved a lot. Right now my holdings in REITs are worth about $266k. Thats around $90k more than they were last time I checked back in December. So the REIT alone is about 9% of the improvement.

Dividends are starting to pay off. In the past 30 days I've gotten about $12,000 in dividend payments from my investments. Many of these are quarterly payments so that rate won't continue every month. But $12k on a $1 million investment is still a full +1.2% increase.

Even though it is just pretend money my Updown account is a fun and useful learning tool.