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OT: Refinancing: Worth It?

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Personal finance experts of the BY: is it worthwhile to refinance a mortgage that I just took out last year?

I'm paying 4% interest on a 30-year mortgage right now, but could potentially refi down to 3% (also 30 years) and reduce the monthly payment by $200.

Depending on how long I take to pay it off, I could save somewhere in the ballpark of 25K in interest over about 20 years. Mortgage interest tax deduction isn't likely to be a factor. Closing costs would be 5K.

FWIW, turning 5K into 25K over 20 years is equivalent to a 9% annual return, which seems pretty good.

Should I go for it? Anything seem out of line?

TIA.
 
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Personal finance experts of the BY: is it worthwhile to refinance a mortgage that I just took out last year?

I'm paying 4% interest on a 30-year mortgage right now, but could potentially refi down to 3% (also 30 years) and reduce the monthly payment by $200.

Depending on how long I take to pay it off, I could save somewhere in the ballpark of 25K in interest over about 20 years. Mortgage interest tax deduction isn't likely to be a factor. Closing costs would be 5K.

FWIW, turning 5K into 25K over 20 years is equivalent to a 9% annual return, which seems pretty good.

Should I go for it? Anything seem out of line?

TIA.
I just closed on Saturday and used better.com which was super easy.

Was at 4.125% for a 30 and went to 3.125% for a 20. I could have gotten 3% for a 20, but they paid me $2,300 to take a higher rate. Break even is about 7 years on that so i took the cash upfront. They gave me an appraisal waiver so my closing costs were $1,000. Basically got paid $1,300 to refinance.

Better.com right now has a 20 year refi at 2.875 and they'll pay you $1,500 to take that. You'd likely be paying very little out of pocket.
 
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I have 28 years remaining on my mortgage and i can do an express refi with my bank which just adjusts the rate for a flat $2k. It would go from 4% to 3.125% and pay off in less than a year, but you can only do it once in the life of the loan. Doubt the rate will ever be 2% so now may be a good time to do it.
 
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I just closed on Saturday and used better.com which was super easy.

Was at 4.125% for a 30 and went to 3.125% for a 20. I could have gotten 3% for a 20, but they paid me $2,300 to take a higher rate. Break even is about 7 years on that so i took the cash upfront. They gave me an appraisal waiver so my closing costs were $1,000. Basically got paid $1,300 to refinance.

Better.com right now has a 20 year refi at 2.875 and they'll pay you $1,500 to take that. You'd likely be paying very little out of pocket.
One of the things I wonder about is the closing costs -- 5K seems high, but this is through a local mortgage broker, not a big national or online bank.

Looks like better.com is currently offering 3.25% for 30 years. Even if closing costs are zero, that wouldn't be as good a deal as what I'm being offered in terms of total savings. The 20 year would be, but I lose flexibility.
 
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One of the things I wonder about is the closing costs -- 5K seems high, but this is through a local mortgage broker, not a big national or online bank.

Looks like better.com is currently offering 3.25% for 30 years. Even if closing costs are zero, that wouldn't be as good a deal as what I'm being offered in terms of total savings. The 20 year would be, but I lose flexibility.
watch out for mortgage brokers because God knows who they'll sell your loan off to, you might end up being stuck with one of the shadier firms and have no recourse other than to refinance out again.
 
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watch out for mortgage brokers because God knows who they'll sell your loan off to, you might end up being stuck with one of the shadier firms and have no recourse other than to refinance out again.
They farmed mine out to Wells Fargo. Haven't had a problem with them.
 
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Worth it. I went from 3.625%, with 27 years remaining down to 2.875% on a 25 year term (Chase Manhattan). Even with some mortgage fees added into the principal, my payment is $50 less per month. Also, if I switch from monthly payments to 1/2 payment every two weeks, I cut off another 3 years from the term, and a load of interest.
 
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$5k seems very high for closing costs.

Title insurance premium will be discounted because it's a re-issue policy.

Attorney's fee should not be more than a few hundred $, recording fees and courier fees about $200, appraisal fee about $300.

Unless you are paying discount points to reduce your rate.
 
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Closing costs are high. If you're going through a bank consider an independent mortgage guy. If you are using a broker already ask them what the costs would be for an 1/8 of a point higher.

I have always (5 or 6 times) done a "no cost" refi where I probably sacrificed the lowest rate but have never had to come out of pocket or with a higher loan amount.
 
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Worth it. I went from 3.625%, with 27 years remaining down to 2.875% on a 25 year term (Chase Manhattan). Even with some mortgage fees added into the principal, my payment is $50 less per month. Also, if I switch from monthly payments to 1/2 payment every two weeks, I cut off another 3 years from the term, and a load of interest.
If anyone can swing it making payments every two weeks cuts a ton of interest!
 
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Closing costs are high. If you're going through a bank consider an independent mortgage guy. If you are using a broker already ask them what the costs would be for an 1/8 of a point higher.

I have always (5 or 6 times) done a "no cost" refi where I probably sacrificed the lowest rate but have never had to come out of pocket or with a higher loan amount.
Great points
 
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Considering you’re new into your mortgage, a refi is a great tool, as not much equity is built in so far, especially if you didn’t put much down?

If you refi after too long (Especially auto), most of the interest is already paid off, and your just elongating payments, which still include interest.
 
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Closing costs are high. If you're going through a bank consider an independent mortgage guy. If you are using a broker already ask them what the costs would be for an 1/8 of a point higher.

I have always (5 or 6 times) done a "no cost" refi where I probably sacrificed the lowest rate but have never had to come out of pocket or with a higher loan amount.
The high closing costs aren't a problem in themselves (I can afford to lose 5K right now), but they eat into the total cost savings over the loan. That's pretty much my only concern there.
 
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I just finished mine this week.

I have a multi-unit which we reside in.

Initially, I got .5 points at 3.125%.

But the jackarse appraiser from rural east bum-youknowwhat came to the city and appraised at $200k below my City Assessment! Which is well below value!

So, even though loan-to-value was still good, they jacked me up to 2.125 points a week before close. LOL.

The bank was so motivated at that point that they brought me up to 3.5% at .75 points, and then took a charge against most of the points, giving me effectively .25 points.

Ridiculous, but still well worth lowering my 4.875% current mortgage.

I knew that guy was trouble when we walked into my home looking like Gomer.
 
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I literally just locked in my refinance yesterday on my first ever mortgage that I took out in April 2019. I got a conventional 30 year fixed at 2.75% down from a 4.4% FHA. I’m saving $800/month with nothing out of pocket.

I did mine through LenderFi after calling local mortgage brokers who were charging a ton in closing costs. LenderFi offered a no-cost refinancing (the lender covers all the closing costs) and you can even refinance again (with no costs) with them in 6 months if the rates drop even more.

Edit: They even waived the appraisal and just took my word for it on how much my home is currently valued. (I did look it up on zillow and refin first to get a rough estimate)
 
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The high closing costs aren't a problem in themselves (I can afford to lose 5K right now), but they eat into the total cost savings over the loan. That's pretty much my only concern there.
Yeah see if you're buying points unknowingly and then do the math on investing the difference vs. how much the points are saving you over 20. Because $5k closing is extremely high in the current climate. As mentioned elsewhere in the thread, might be able to get someone to pay you (but probably likely at the non-best rate).
 
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I just got a schedule phone call back from one of the local lenders I called yesterday and they said that they weren’t gonna be able to match what LenderFi offered us with both closing costs covered via lender credits and the rate we locked in at. We were told to take that deal and run.
 
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Yeah see if you're buying points unknowingly and then do the math on investing the difference vs. how much the points are saving you over 20. Because $5k closing is extremely high in the current climate. As mentioned elsewhere in the thread, might be able to get someone to pay you (but probably likely at the non-best rate).
Possibly, though I just contacted Wells Fargo directly and they offered a worse interest rate, with the same closing costs, and with points on top of that. Just awful.

I'll shop around a little. At the end of the day I just care about maximizing (interest saved - closing costs), so both matter.
 
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We had our closing last week. We're saving roughly $70k over the life of our mortgage. Our monthly payment is about $50 less despite the new mortgage being five years shorter in length.
 

HuskyHawk

Hoping to see something that looks like basketball
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Personal finance experts of the BY: is it worthwhile to refinance a mortgage that I just took out last year?

I'm paying 4% interest on a 30-year mortgage right now, but could potentially refi down to 3% (also 30 years) and reduce the monthly payment by $200.

Depending on how long I take to pay it off, I could save somewhere in the ballpark of 25K in interest over about 20 years. Mortgage interest tax deduction isn't likely to be a factor. Closing costs would be 5K.

FWIW, turning 5K into 25K over 20 years is equivalent to a 9% annual return, which seems pretty good.

Should I go for it? Anything seem out of line?

TIA.
Yes. Especially since you just took it out. Take a look at what the payments would be on a 15 year with the lower rates.
 
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We had our closing last week. We're saving roughly $70k over the life of our mortgage. Our monthly payment is about $50 less despite the new mortgage being five years shorter in length.
I take it your original mortgage was from a while ago at a much higher rate? Either that or your house is very expensive.
 
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They’re so bombarded with refi’s they’re not even taking new applications. Damn

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