Refinancing: Worth It? | Page 3 | The Boneyard

Refinancing: Worth It?

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Tenspro2002

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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.
 
Saw that some of the closing costs are going up due to some added fees.
 
BackAftaThis said:
What are the benefits to modifying vs refinancing other than costs?
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We modified twice when rates started dropping after 08. Paperwork was simple, it was done rather quickly and we didn't pay much to do it. We didn't have to qialify since we already had the mortgage. Someone mentioned in this thread that they refinanced for free, that might have been a modification, not sure though.

I think that lenders would much rather work with you, than to lose a profitable contract to another bank.

What you pay to the bank in the form of interest over the lifetime of the loan is insane.

If you can afford to make one extra payment to the principal every year, you'll save yourself a lot of money and pay off your mortgage sooner.
 
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anyone hear anything about Filo Mortgage? seems like they're new this year, but have some phenomenal rates that seem too good to be true...and as the old saying goes...
 
Just talked with a rep from my loan company: New Rez:

26 years left in a 30 year mortgage at a 3.375% rate. About 40k away from 20% principal paid off to remove our mortgage insurance.

The rep quoted us for a FSA streamline 24 year mortgage at 2.875%. For a $50/month increase we'd have a $120/month increase of the proportion of our payment going to principal and of course that proportion changes throughout time.

The $4k fees will be spread out through the life of the mortgage and get to have one month without payment so it'll be nice to have 2.5k+ go towards my credit card payments and/or use that as a safety cushion.

Thoughts?
 
Hey Adrien! said:
Just talked with a rep from my loan company: New Rez:

26 years left in a 30 year mortgage at a 3.375% rate. About 40k away from 20% principal paid off to remove our mortgage insurance.

The rep quoted us for a FSA streamline 24 year mortgage at 2.875%. For a $50/month increase we'd have a $120/month increase of the proportion of our payment going to principal and of course that proportion changes throughout time.

The $4k fees will be spread out through the life of the mortgage and get to have one month without payment so it'll be nice to have 2.5k+ go towards my credit card payments and/or use that as a safety cushion.

Thoughts?
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You always "skip" a payment on a re-fi or purchase. Mortgages are paid in arrears, rent in advance. I wouldn't get too caught up with the years / payment. You can always pay more if you are able. Obviously not sure of your whole picture but I would go for a 30 year at the lowest rate and if paying it off early is important to you make extra payments.
 
casual-yardin said:
You always "skip" a payment on a re-fi or purchase. Mortgages are paid in arrears, rent in advance. I wouldn't get too caught up with the years / payment. You can always pay more if you are able. Obviously not sure of your whole picture but I would go for a 30 year at the lowest rate and if paying it off early is important to you make extra payments.
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I'd rather not re-fi back into a 30 year.

Based on what I shared in the previous post, better to:

a) just stay where I'm at
b) refi into the rate they offered

Since it's the company I've been with since the start, I feel like they're giving me this rate as an incentive not to shop around to other companies. Better to keep me at a rate where they lose less interest a month and lose me completely.

Thanks again for all your help.
 
Hey Adrien! said:
Just talked with a rep from my loan company: New Rez:

26 years left in a 30 year mortgage at a 3.375% rate. About 40k away from 20% principal paid off to remove our mortgage insurance.

The rep quoted us for a FSA streamline 24 year mortgage at 2.875%. For a $50/month increase we'd have a $120/month increase of the proportion of our payment going to principal and of course that proportion changes throughout time.

The $4k fees will be spread out through the life of the mortgage and get to have one month without payment so it'll be nice to have 2.5k+ go towards my credit card payments and/or use that as a safety cushion.

Thoughts?
Expand ...

will they modify the rate on the existing loan for a small fee?
 
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huskiesouth said:
If anyone can swing it making payments every two weeks cuts a ton of interest!
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does anyone know, can I simply start paying every 2 weeks or does it require a formal process for an existing loan? I currently have a 15 years and I pay extra money every month? Thanks in advance.
 
DaveHuskiesFan said:
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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did they bundle closing costs into the total mortgage? I won’t do that.
 
uconnyankee said:
I was able to get 2.375% (2.4% APR), on a 15 year...

Getting a little nervous as I'm waiting for everything to go through. Haven't heard much in past couple weeks as broker is pushing through a ton of loans. I check in periodically and am told everything is on schedule.
Like sitting on a plane stuck on the tarmac....
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Just signed papers to sell our house in Vermont (more or less inherited from my in-laws) and the buyers have a rate similar to that, I think 2.275% on a 15 year. I haven’t really watched the rates. I’m still at 4.1% on my 15 year but there is no point in refinancing with 6 years left.
 
Stinger92860 said:
did they bundle closing costs into the total mortgage? I won’t do that.
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I didn’t have closing costs, I got paid Roughly $1,300 to refi. But if you end up having closing costs they allow you pay upfront or roll them into the loan. Whichever you want
 
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Stinger92860 said:
does anyone know, can I simply start paying every 2 weeks or does it require a formal process for an existing loan? I currently have a 15 years and I pay extra money every month? Thanks in advance.
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You can just start making extra payments. No formal process needed
 
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HuskyHawk said:
Just signed papers to sell our house in Vermont (more or less inherited from my in-laws) and the buyers have a rate similar to that, I think 2.275% on a 15 year. I haven’t really watched the rates. I’m still at 4.1% on my 15 year but there is no point in refinancing with 6 years left.
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Crazy right!!! Historically 4.1% is a great rate.

I’m pretty conservative but I know folks that have cashed out at lower rates knowing they could make more in markets or other investments.

can’t wait to not have mortgage payments.
 
uconnyankee said:
Crazy right!!! Historically 4.1% is a great rate.

I’m pretty conservative but I know folks that have cashed out at lower rates knowing they could make more in markets or other investments.

can’t wait to not have mortgage payments.
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I was able to grab a 2.5% 15 year with almost no costs 7 years ago when the rates dipped. I've been looking, but can't find anything to actually save me money.
 
Ended up with a refi from my company I already have a loan with:

  • 26 years remaining to 24
  • 3.375% to 2.875%
  • $2k in closing
Payments will be the same but on my first payment, $200 will be proportioned to principal rather than interest. Basically it’ll pay for itself after one year and should get us off PMI at least one year sooner.
 
DaveHuskiesFan said:
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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Thank you for this. I also just closed at better.com last week. I went from a 4.5% 30yr to a 2.18% 15yr. I locked in about 2 weeks ago or so.
 
ZenConn said:
Thank you for this. I also just closed at better.com last week. I went from a 4.5% 30yr to a 2.18% 15yr. I locked in about 2 weeks ago or so.
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Was there any money down for this rate?
 
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temery said:
How long did the process take?
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Most are taking 30-45 days right now. Mine was just over a month. FILO is an interesting new one that is saying they can close in 15-20 days but they're only licensed in a handful of states currently
 
huskiesNhoos said:
Most are taking 30-45 days right now. Mine was just over a month. FILO is an interesting new one that is saying they can close in 15-20 days
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Did they do an appraisal or just go off your assessment?
 
temery said:
Did they do an appraisal or just go off your assessment?
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They waived it for me in CO but my brother in NC is required to get an appraisal. We're similar financial situations so dunno if its based on location or what
 
Using better.com to refi my multi-family investment in JC, NJ. Should be closing by the 15th of this month.

Thanks to this thread I got into the idea of refi and I will be able to get rid of the FHA monthly MI, shaved 6.5 years off the term (from 26.5 to 20) , and still saving about $300 per month. Was able to catch a 3.0% rate (went down from FHA 4.25%). It wasn't the lowest rate but I tried to minimize closing costs so I'll be paying about 1.7k cash to close. Better.com makes the process a lot smoother than I thought.

Thanks to whoever recommended the site here in the previous pages. Great experience so far. I hope my closing goes without any hiccups

EDIT: I see some people essentially got paid to refinance. That is freaking awesome. I wonder if loan size has something to do with it. I still have 498k payoff. My refi will cost about $1.7k which isn't bad IMO, but I'm glad others have gotten paid to do it. What a great deal that must be!
 
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