30yr Mortgage Refi Rates

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DireStraits
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30yr Mortgage Refi Rates

Post by DireStraits » Mon Sep 18, 2017 10:31 am

I have decided it makes sense to refi our current 30yr, 4.125% mortgage to a lower rate 30yr fixed mortgage and save/invest the difference. I'm currently seeking the best rates, but hoped some of you might be of help. (and yes, I'm doing a Google search, as well as checking well-known financial institutions.)

Where are you seeing the best 30yr fixed rates?

Thanks.

KT785
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Re: 30yr Mortgage Refi Rates

Post by KT785 » Mon Sep 18, 2017 10:48 am

We refinanced our 30 year mortgage last year with State Farm Bank since they had the lowest rates for our situation at the time. We went from 4.875% to 3.125% for another 30 year with no points--we'd bought our house only a couple years beforehand so another 30 year made sense.

I'm highly doubtful you'll find a rate that low now, but you might check out the State Farm Bank mortgage finder. IIRC, there was little to no origination fee and accordingly, the closing costs were also lower than the other lenders we evaluated (not to mention they had the lowest rates at the time). Of what I understand, you don't need to have insurance or other accounts with State Farm to apply for a mortgage with them.

https://mortgage.statefarm.com/LoanFind ... ateTracker

engineer1969
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Re: 30yr Mortgage Refi Rates

Post by engineer1969 » Mon Sep 18, 2017 12:00 pm

bankrate.com displays the current competitive rates based on your local.

Keep in mind the rates shown assume high equity and 740+ credit score. The rates adjust in 0.125 increments based on your situation and selected bank.

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Meg77
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Re: 30yr Mortgage Refi Rates

Post by Meg77 » Mon Sep 18, 2017 1:39 pm

I'm a banker, and I very much doubt that makes sense to refinance your loan into another 30 year fixed mortgage. The going rate today for a 30 year fixed refinance is about 3.70% assuming a loan on a single family homestead with a balance between $150K and $417K, 80% LTV or less, perfect credit and good income ratios. That's a savings of less than half a percent a year - which usually not worth the closing costs (not to mention hassles) of refinancing.

If refinancing to another 30 year fixed loan substantially reduces your payment, then that means you probably have many fewer than 30 years left on your current loan (since the drop in interest alone isn't enough to drop the payment much). That means you may actually pay MORE in interest over the remaining life of the loan even though you are reducing the interest rate - this is because you'll be stretching out the repayment over X many more years compared to what you have left to pay.

If you're willing to refinance, consider moving up to a 15 year fixed loan to get a rate in the 2.9% range. Even if your payment stays the same or rises a bit, you'll be out of debt 15 years sooner - and that will give you plenty of extra cash flow to invest.
"An investment in knowledge pays the best interest." - Benjamin Franklin

lotusflower
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Re: 30yr Mortgage Refi Rates

Post by lotusflower » Tue Sep 19, 2017 1:05 pm

If you are just rate-shopping, why not call a mortgage broker (best to get a referral from a friend to find a good one). While they are going to make a bunch off selling you a mortgage, most of that seems to be paid by the bank. I haven't seen a way to get the broker's "wholesale" price directly without the middle man, whether it's the broker with access to many loans, or the banker, who can only rep one company's mortgage product.
Meg77 wrote:
Mon Sep 18, 2017 1:39 pm
I'm a banker, and I very much doubt that makes sense to refinance your loan into another 30 year fixed mortgage. The going rate today for a 30 year fixed refinance is about 3.70% assuming a loan on a single family homestead with a balance between $150K and $417K, 80% LTV or less, perfect credit and good income ratios. That's a savings of less than half a percent a year - which usually not worth the closing costs (not to mention hassles) of refinancing.
Well, at the high end ($400k), half percent per year is $2000/year which would make me pretty enthusiastic. With a good faith estimate of closing costs you should be able to calculate your break-even duration pretty easily.
Meg77 wrote: If refinancing to another 30 year fixed loan substantially reduces your payment, then that means you probably have many fewer than 30 years left on your current loan (since the drop in interest alone isn't enough to drop the payment much). That means you may actually pay MORE in interest over the remaining life of the loan even though you are reducing the interest rate - this is because you'll be stretching out the repayment over X many more years compared to what you have left to pay.
Well, time value of money. If you can do more productive things with that money, then it's okay to pay more interest. But Meg is totally right that you shouldn't just look at payment savings without thinking about the loan term. You can always refi to a lower rate, and then keep paying your old payment so that the loan will be paid off faster than it would have otherwise been paid off in the first place.
Meg77 wrote: If you're willing to refinance, consider moving up to a 15 year fixed loan to get a rate in the 2.9% range. Even if your payment stays the same or rises a bit, you'll be out of debt 15 years sooner - and that will give you plenty of extra cash flow to invest.
Personally I like the 30 year loan with accelerated payments. Then if you lose your job or someone gets sick, you can free up extra cash flow by reverting to the minimum payment without any need to refinance. The premium interest rate you pay for the 30 year loan is like an insurance policy; you're paying a bit extra for the right to reduce your payment whenever you like. But if that is not important, you have a very stable income and a hefty emergency fund, then absolutely go for the 15-year rate. You can use the same math as above to see that this privilege costs several thousand dollars a year.

MrNewEngland
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Re: 30yr Mortgage Refi Rates

Post by MrNewEngland » Tue Sep 19, 2017 2:17 pm

I just sold my house so I am moving back into my condo. I am taking the money from the house and putting it into a refinanced mortgage for the condo. I am going from 4.625% to 3.875%... but I was really surprised and disappointed to find out that mortgages under $100k do not qualify for the best rates. I figured with a lower loan to value ratio I'd get the best rate available, but apparently not.

I decided it was still worth refinancing because I wanted to get my overall payments down and simplify my life (I also sold my Jeep to get rid of that payment).
Last edited by MrNewEngland on Tue Sep 19, 2017 3:59 pm, edited 1 time in total.

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unclescrooge
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Re: 30yr Mortgage Refi Rates

Post by unclescrooge » Tue Sep 19, 2017 3:23 pm

Since it's rare that anyone lives in a home for 30 years, getting a 30 year loan vs a 10 year ARM with a lower rate is like throwing money away.

Make sure you're planning on staying put for 30 years.

MrNewEngland
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Re: 30yr Mortgage Refi Rates

Post by MrNewEngland » Tue Sep 19, 2017 3:59 pm

unclescrooge wrote:
Tue Sep 19, 2017 3:23 pm
Since it's rare that anyone lives in a home for 30 years, getting a 30 year loan vs a 10 year ARM with a lower rate is like throwing money away.

Make sure you're planning on staying put for 30 years.
While I don't plan on staying put for 30 years I do think there's a very good chance I will own the place for over 10 years. It's a great rental and I could see myself renting it out again. It's in a desirable area of town and shows really well bc it's a corner unit. I see your point... it just wasn't worth the risk if I do hang onto it as an investment in the long term.

Easy Rhino
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Re: 30yr Mortgage Refi Rates

Post by Easy Rhino » Tue Sep 19, 2017 6:07 pm

Meg77 wrote:
Mon Sep 18, 2017 1:39 pm
I'm a banker, and I very much doubt that makes sense to refinance your loan into another 30 year fixed mortgage. he going rate today for a 30 year fixed refinance is about 3.70% assuming a loan on a single family homestead with a balance between $150K and $417K, 80% LTV or less, perfect credit and good income ratios. That's a savings of less than half a percent a year - which usually not worth the closing costs (not to mention hassles) of refinancing.
I humbly disagree. I refi'd twice, each time to capture a half percent drop in rate. Now in my case I got basically a zero-cost refis, lender credits (negative points) were enough to cover all settlement charges.
If you're willing to refinance, consider moving up to a 15 year fixed loan to get a rate in the 2.9% range. Even if your payment stays the same or rises a bit, you'll be out of debt 15 years sooner - and that will give you plenty of extra cash flow to invest.
I agree here. especially If the OP has already had the old mortgage for a while, refi to a shorter term might be a good deal.

Bacchus01
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Re: 30yr Mortgage Refi Rates

Post by Bacchus01 » Wed Sep 20, 2017 1:52 am

I'm surprised a banker would even say such a thing without understanding more details.

A half percent on many loans could easily cover closing costs.

I'd refinance every week if the differential had a payback under 12 months

buckstar
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Re: 30yr Mortgage Refi Rates

Post by buckstar » Wed Sep 20, 2017 6:20 am

Zillow has been my go to place for mortgage rates for he last few years.

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djpeteski
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Re: 30yr Mortgage Refi Rates

Post by djpeteski » Wed Sep 20, 2017 6:26 am

I did an awesome refi, a couple of years back.

I had a 15 yr at 3.5%. I replaced that with a Home Equity Loan:

First position
Fixed, term (7 years) and rate 2.3%
No closing cost.

In the end it saved me less than $1,000 as I paid it off 13 months later, but it is/was a great option.

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CAsage
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Re: 30yr Mortgage Refi Rates

Post by CAsage » Wed Sep 20, 2017 6:28 am

I've had great rates and good, fast service from no-cost, no fee mortgage companies like Cashcall Mortgage, who are currently offering a 3.75% 30 year loan (not in Washington, states may vary). Definitely look for a no cost. no fee loan (yes, the fees are wrapped into your slightly higher rate, but at least it's a completely transparent price). Anytime I could drop the rate on a no cost, no fee mortgage, it was worth the few hours to pull paperwork and apply.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

DriftWood
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Re: 30yr Mortgage Refi Rates

Post by DriftWood » Wed Sep 20, 2017 9:10 am

We bought our house in 2012 with 15 yr mortgage at 3.125% from BoA. Last September, we did a refinance to 10 yr mortgage with 2.5% rate (zero closing cost) which is from PHH. Monthly payment is slightly up around $100. That was right before the rate hike after presidential election.

Raladic
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Re: 30yr Mortgage Refi Rates

Post by Raladic » Wed Sep 20, 2017 6:17 pm

Provident Funding - https://www.provident.com/

I've refinanced with them 3 times now and their price is very good and process very simple and online.

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Cycle
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Re: 30yr Mortgage Refi Rates

Post by Cycle » Thu Sep 21, 2017 4:50 pm

Do the math on just making additional cost payments on your current mortgage. I once refinanced from a 15 to a 10, but any savings were eaten by closing costs and then we sold the place. The right decision in that scenario would have been to just pay a couple hundred extra into the 15yr per month.

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Meg77
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Re: 30yr Mortgage Refi Rates

Post by Meg77 » Fri Sep 22, 2017 9:40 am

Bacchus01 wrote:
Wed Sep 20, 2017 1:52 am
I'm surprised a banker would even say such a thing without understanding more details.

A half percent on many loans could easily cover closing costs.

I'd refinance every week if the differential had a payback under 12 months
Easy Rhino wrote:
Tue Sep 19, 2017 6:07 pm
Meg77 wrote:
Mon Sep 18, 2017 1:39 pm
I'm a banker, and I very much doubt that makes sense to refinance your loan into another 30 year fixed mortgage. he going rate today for a 30 year fixed refinance is about 3.70% assuming a loan on a single family homestead with a balance between $150K and $417K, 80% LTV or less, perfect credit and good income ratios. That's a savings of less than half a percent a year - which usually not worth the closing costs (not to mention hassles) of refinancing.
I humbly disagree. I refi'd twice, each time to capture a half percent drop in rate. Now in my case I got basically a zero-cost refis, lender credits (negative points) were enough to cover all settlement charges.
If you're willing to refinance, consider moving up to a 15 year fixed loan to get a rate in the 2.9% range. Even if your payment stays the same or rises a bit, you'll be out of debt 15 years sooner - and that will give you plenty of extra cash flow to invest.
I agree here. especially If the OP has already had the old mortgage for a while, refi to a shorter term might be a good deal.
You're right that we don't have enough details to know for sure, which is why I said "I very much doubt" that it makes sense, not that it doesn't for sure. The vast majority of refinances are NOT without closing costs, however. Even those marketed as such usually only waive the appraisal and/or bank fee - not title work which can amount to 1% of the loan or more in most states. And a half a percent rate drop will usually cover closing costs eventually, but the breakeven point is typically more than 3 years into the future at that rate differential. That's assuming OP can get that big of a rate drop of course. On top of that, if the OP is far into their current 30 year amortization, refinancing even at a lower rate could INCREASE the interest paid over the remaining life of the loan due to the stretching out of the repayment.

So yes in a perfect scenario a refi could make sense. But given the info presented (and the stated goal of investing the difference in payment - which is likely to be miniscule unless this loan size is 7 figures), I remain doubtful of the strategy.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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