OT: Refinancing: Worth It?

UConn_Top_Dog

"Your school wins games... WE WIN CHAMPIONSHIPS!"
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Keep in mind how long you are planning on staying in your home. Treat it like any other long term investment. If you are planning on possibly moving in 5 or so years I would say the costs of refinancing is not worth saving in interest. If you plan on keeping this home through the entire life of the loan then it is worth it. You should also compare the total amount you would spend until maturity if you kept the current rate and made 13 payments per year instead of 12. Sometimes making one extra payment per year would yield more savings overall than a reduced rate. Putting my UConn Real Estate and Urban Economics degree to use on the BY, wouldn’t expect that.
 
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Refinanced in March from a 30 year with 25.5 years left to a 20 year. Monthly is lower and saving a ton over the life. No brainer.
 
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Just refinanced to 15 years with a 2.25 rate. Gonna save about $100k over the life of the mortgage.
 
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Refinanced in April. Went from 4.125 to 3.125 on a 30 year. Was 2.5 years into, bank actually owed me $2K at closing. I’m putting $200 a month extra into it which is coming out roughly to what our monthly payment was before the refinance - except I’ll have it paid off in 23 years instead of 30 and save about $38K in interest by paying it off in 23 years and that’s not even counting the interest I’m saving off the refinance.
 
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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.
Yeah, I'm thinking of doing this too. I'm presently at 3.875% and only little over 4 years but if I can get close to about 3.25% for a 30 year loan I will take it. I might even cash out a little since my house value has risen a lot. I do plan to move to Florida I think in the next 5 years or so.
 
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before you refi and possibly incur thousands of closing costs, ask the current lender if a rate modification is possible. if so, usually only a modest fee. lenders are motivated to keep the loan than lose it to another lender.
 
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Refinanced in April. Went from 4.125 to 3.125 on a 30 year. Was 2.5 years into, bank actually owed me $2K at closing. I’m putting $200 a month extra into it which is coming out roughly to what our monthly payment was before the refinance - except I’ll have it paid off in 23 years instead of 30 and save about $38K in interest by paying it off in 23 years and that’s not even counting the interest I’m saving off the refinance.

This is basically the same scenario I'm in, although I have no idea how they owed you money at closing. Either way, it's hard for this to be a bad deal.

before you refi and possibly incur thousands of closing costs, ask the current lender if a rate modification is possible. if so, usually only a modest fee. lenders are motivated to keep the loan than lose it to another lender.

I hear what you and others are saying -- the 5K closing costs seem exorbitant for what should be a trivial process. However, I'm not as concerned about minimizing closing costs (I have cash to spare) as about maximizing the total savings over 20 years.

- If I get a no-cost refinance, but only to 3.25%, I would save 18K in interest over 20 years.
- If I pay 5K to re-finance, but get 3%, I would save 36K in interest over 20 years.

Maybe the 5K now is worth more than the extra 18K spread over 20 years, but it's not obvious that that's the case.
 
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This is basically the same scenario I'm in, although I have no idea how they owed you money at closing. Either way, it's hard for this to be a bad deal.



I hear what you and others are saying -- the 5K closing costs seem exorbitant for what should be a trivial process. However, I'm not as concerned about minimizing closing costs (I have cash to spare) as about maximizing the total savings over 20 years.

- If I get a no-cost refinance, but only to 3.25%, I would save 18K in interest over 20 years.
- If I pay 5K to re-finance, but get 3%, I would save 36K in interest over 20 years.

Maybe the 5K now is worth more than the extra 18K spread over 20 years, but it's not obvious that that's the case.

You would need to get little over 7% interest over those 20 years to make hanging on to that $5K work it.
 

CTBasketball

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No cost re-finance? How have I never heard of this?
 

the Q

Thanos was right...
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This is basically the same scenario I'm in, although I have no idea how they owed you money at closing. Either way, it's hard for this to be a bad deal.



I hear what you and others are saying -- the 5K closing costs seem exorbitant for what should be a trivial process. However, I'm not as concerned about minimizing closing costs (I have cash to spare) as about maximizing the total savings over 20 years.

- If I get a no-cost refinance, but only to 3.25%, I would save 18K in interest over 20 years.
- If I pay 5K to re-finance, but get 3%, I would save 36K in interest over 20 years.

Maybe the 5K now is worth more than the extra 18K spread over 20 years, but it's not obvious that that's the case.

where the heck do you get no cost refinance?
 

jleves

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Interest rates are insane right now. I got a 15 year 2.5% loan about 5 years ago and I thought, never going to beat that one!

Now I may have to look for a 10 year refi.
 

ClifSpliffy

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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.
'I knew that guy was trouble when we walked into my home looking like Gomer.'
on behalf of gomers everywhere, i resemble that remark. i am sooo offended. lol.
on the udder hand, this is a most excellant thread. real stories from real people. noice.
 
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where the heck do you get no cost refinance?

LenderFi is who I got mine from. Better, RateRabbit and LoanDepot also offer no cost refinancing, from what I’ve seen, but I have no personal experience with them.
 
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This is basically the same scenario I'm in, although I have no idea how they owed you money at closing. Either way, it's hard for this to be a bad deal.



I hear what you and others are saying -- the 5K closing costs seem exorbitant for what should be a trivial process. However, I'm not as concerned about minimizing closing costs (I have cash to spare) as about maximizing the total savings over 20 years.

- If I get a no-cost refinance, but only to 3.25%, I would save 18K in interest over 20 years.
- If I pay 5K to re-finance, but get 3%, I would save 36K in interest over 20 years.

Maybe the 5K now is worth more than the extra 18K spread over 20 years, but it's not obvious that that's the case.

For me, they owed me $2000 bc I built in closing costs and they overestimated.
 

CTBasketball

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For me, they owed me $2000 bc I built in closing costs and they overestimated.
LenderFi is who I got mine from. Better, RateRabbit and LoanDepot also offer no cost refinancing, from what I’ve seen, but I have no personal experience with them.
I got paid to refinance by Better.com. Took a worse rate than the lowest rate offered.
Are these legit? I’m seriously considering it.
 
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Are these legit? I’m seriously considering it.
Yep totally legit. You can also change your rate after you lock on Better. So once you lock, you lock all the rates available to you. If you decide you want the lowest rate with out of pocket costs you can go with that. If you decide you want a higher rate with no out of pocket costs you can do that.
 
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Looking to refinance from 30-year (with 25 yrs left) to a 15-year while rates are much lower than ours and hoping for as little upfront cost possible. Is LenderFi, Better, LendingTree or seeing what existing mortgage company can do the best play to start here?
 

Doctor Hoop

Prescribing Hardwood Excellence
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A question that I haven't been able to find an answer to. I've got 12 yrs. left on a 20 yr at 3.75%, which is not terrible. If I could get 2.5% (or therabouts) on a 10 year I'd take it. I'm told they exist, but not everyone offers them. Anyone know where I could find it? I'm in NH if that matters.
 

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