Are you refinancing now?

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bg5
Posts: 90
Joined: Mon Jan 15, 2018 11:07 am

Re: Are you refinancing now?

Post by bg5 » Wed Aug 14, 2019 12:43 pm

Well....I ended up pulling the trigger today. We refinanced our home that we own and we previously had a 30 year @ 4.375 and we still had 27 years to go. We owe around 236k on a home valued at 500k. We decided to refi to a 15 year loan at 2.87% and our payment will go up about $350 a month. It will save us around 113k in interest payments but the main reason for doing it is to make sure our home is paid off before retirement. I will be 53 and my wife will be 49 when its paid off.

The other factor is that we both max out our roth each year (12k combined) and between the two of us put around (20k combined) into a 457b account. We are also teachers with very stable incomes and we both will have pensions (pension system appears to be healthy but who knows) that are pretty generous.

We both agreed that investing money might work out better in the long term but we just really want that house paid off early as that will be the biggest obstacle that would prevent us from retiring early.

THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.

We used Arbor Financial Credit Union in Kalamazoo Michigan and they are offering a deal right now to attempt to get new business. We have used them for a while and have loved them for all their services.

Please let me know if those costs seem crazy high

classicindexer
Posts: 66
Joined: Tue Apr 09, 2019 10:43 am

Re: Are you refinancing now?

Post by classicindexer » Wed Aug 14, 2019 12:54 pm

bg5 wrote:
Wed Aug 14, 2019 12:43 pm
THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.
That doesn't sound too bad in terms of closing costs for that rate. Does it include all 3rd party fees (title insurance, appraisal, etc.)? Are you paying the closing costs out of pocket or rolling the closing costs into the new loan? You could check your specific situation against aimloan.com. A 15 YR 2.875% at AimLoan for me said Total Lender & 3rd Party Costs is $4,279.89. I am currently comparing AimLoan's rates to a local credit union.

Independent George
Posts: 468
Joined: Wed Feb 17, 2016 12:13 pm

Re: Are you refinancing now?

Post by Independent George » Wed Aug 14, 2019 1:32 pm

Fingers crossed, I just got quoted 3.25% for a 15 year refi, with the monthly payment just $83 more than my current 30 years at 4.50%. The only question mark is whether I have 80% LTV (since I purchased at peak bubble 2007), but zillow puts me close enough that I should have plenty of assets to cover any difference.

jdbst56
Posts: 10
Joined: Thu Jul 28, 2011 10:06 pm

Re: Are you refinancing now?

Post by jdbst56 » Wed Aug 14, 2019 1:39 pm

I'm 17 months into a 4.25% 30 year fixed with 195k left to pay. House is valued at 355k. I'm debating if I should try to lock in something now or wait to see if the rates drop further. mtgprofessor is showing 3.375% for 30 year fixed with a $500 credit. My out of pocket costs are still probably going to be 2k or so. Thoughts?

Chimz
Posts: 10
Joined: Sun May 27, 2018 4:38 pm

Re: Are you refinancing now?

Post by Chimz » Wed Aug 14, 2019 2:24 pm

I’m thinking about it. Currently 3 years into 30 year at 4.25 with balance of $358k . I’m getting quotes for 3.5% for a 30 year via the mortgage professor and 3.625 from Aimloan.
Option for a 15 year is 3.25%

Primary motivation is to reduce monthly payment so I can tackle consumer debt and once that’s out the way pay in extra each month =what I am currently paying at 4.25%

Don’t plan on staying in the house for more than 10 years at most.
Am I on the right track ?

Mako
Posts: 154
Joined: Wed Feb 28, 2007 9:34 am

Re: Are you refinancing now?

Post by Mako » Wed Aug 14, 2019 2:38 pm

I've locked with AIM for a 15 year at 3.125%. Not no cost but not far from it (esp. if appraisal is waived, which they said may happen), and they were the cheapest I found at the time. I've checked every day since just out of curiosity and got annoyed that the costs were lower the very next day but they went back up and costs are quite a bit higher right now. Sure, rates may improve but I already missed 3.0% earlier this summer at my credit union and didn't feel like messing around again. Currently have a 4.75% 30 year, 1 year in, my monthly cost will go up less than $200.

classicindexer
Posts: 66
Joined: Tue Apr 09, 2019 10:43 am

Re: Are you refinancing now?

Post by classicindexer » Wed Aug 14, 2019 3:29 pm

I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.

bg5
Posts: 90
Joined: Mon Jan 15, 2018 11:07 am

Re: Are you refinancing now?

Post by bg5 » Wed Aug 14, 2019 4:11 pm

classicindexer wrote:
Wed Aug 14, 2019 12:54 pm
bg5 wrote:
Wed Aug 14, 2019 12:43 pm
THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.
That doesn't sound too bad in terms of closing costs for that rate. Does it include all 3rd party fees (title insurance, appraisal, etc.)? Are you paying the closing costs out of pocket or rolling the closing costs into the new loan? You could check your specific situation against aimloan.com. A 15 YR 2.875% at AimLoan for me said Total Lender & 3rd Party Costs is $4,279.89. I am currently comparing AimLoan's rates to a local credit union.
Yes, it includes everything except appraisal...think that will be $350 and we are just rolling costs into loan. Surprised they are still running this special and the cool thing is once you apply your locked in at 2.875%. Im sure someday I will look back and laugh at this rate. My first home was 6.2% in 2006 before the crash.

mschurner
Posts: 36
Joined: Sun Sep 23, 2018 11:33 pm

Re: Are you refinancing now?

Post by mschurner » Wed Aug 14, 2019 6:43 pm

bg5 wrote:
Wed Aug 14, 2019 12:43 pm
Well....I ended up pulling the trigger today. We refinanced our home that we own and we previously had a 30 year @ 4.375 and we still had 27 years to go. We owe around 236k on a home valued at 500k. We decided to refi to a 15 year loan at 2.87% and our payment will go up about $350 a month. It will save us around 113k in interest payments but the main reason for doing it is to make sure our home is paid off before retirement. I will be 53 and my wife will be 49 when its paid off.

The other factor is that we both max out our roth each year (12k combined) and between the two of us put around (20k combined) into a 457b account. We are also teachers with very stable incomes and we both will have pensions (pension system appears to be healthy but who knows) that are pretty generous.

We both agreed that investing money might work out better in the long term but we just really want that house paid off early as that will be the biggest obstacle that would prevent us from retiring early.

THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.

We used Arbor Financial Credit Union in Kalamazoo Michigan and they are offering a deal right now to attempt to get new business. We have used them for a while and have loved them for all their services.

Please let me know if those costs seem crazy high

You got solid rate for 15 year refi. Closing cost appears pretty reasonable. Did you pay anything for points to get that low rate?

Golf maniac
Posts: 290
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: Are you refinancing now?

Post by Golf maniac » Wed Aug 14, 2019 7:34 pm

mariezzz wrote:
Mon Aug 12, 2019 7:34 pm
Keep in mind - you can't just think of interest rate.
The interest rate depends on how much you're paying in certain fees.
If you go to aimloan.com and enter your info, they will lay out all the fees for you (look at guaranteed lender fee, guaranteed lender fee credit - the lower your interest rate, the lower your guaranteed lender fee credit), and you can compare how changing the interest rate changes the fees. Enter the relevant info, then a page with rates comes up. Click on the link "see more X-year rates", then click on 'details' for each rate you're interested in. Every lender is doing something similar, even if they don't make it so easy for you to see that.

"No cost" means you're rolling closing expenses into the refinance. That costs you - you pay for it over time.

Interest rates still aren't as low as they were in 2012. Still can't beat the rate I got then (taking into account the fees I paid).
There are “no cost” loans where you pay a higher interest rate above market rate and the fees are not rolled into the loan. You have to be careful that they don’t add any fees to your balance but these loans are out there.

For OP, interest rates vary in each market, I suggest online (aim loan and bankrate.com) and also local lenders (banks and credit unions). Watch the closing costs as they can vary widely.

Golf maniac
Posts: 290
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: Are you refinancing now?

Post by Golf maniac » Wed Aug 14, 2019 7:35 pm

classicindexer wrote:
Wed Aug 14, 2019 3:29 pm
I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.
That is a great rate.

bg5
Posts: 90
Joined: Mon Jan 15, 2018 11:07 am

Re: Are you refinancing now?

Post by bg5 » Wed Aug 14, 2019 7:38 pm

mschurner wrote:
Wed Aug 14, 2019 6:43 pm
bg5 wrote:
Wed Aug 14, 2019 12:43 pm
Well....I ended up pulling the trigger today. We refinanced our home that we own and we previously had a 30 year @ 4.375 and we still had 27 years to go. We owe around 236k on a home valued at 500k. We decided to refi to a 15 year loan at 2.87% and our payment will go up about $350 a month. It will save us around 113k in interest payments but the main reason for doing it is to make sure our home is paid off before retirement. I will be 53 and my wife will be 49 when its paid off.

The other factor is that we both max out our roth each year (12k combined) and between the two of us put around (20k combined) into a 457b account. We are also teachers with very stable incomes and we both will have pensions (pension system appears to be healthy but who knows) that are pretty generous.

We both agreed that investing money might work out better in the long term but we just really want that house paid off early as that will be the biggest obstacle that would prevent us from retiring early.

THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.

We used Arbor Financial Credit Union in Kalamazoo Michigan and they are offering a deal right now to attempt to get new business. We have used them for a while and have loved them for all their services.

Please let me know if those costs seem crazy high

You got solid rate for 15 year refi. Closing cost appears pretty reasonable. Did you pay anything for points to get that low rate?

I did not have to pay anything to get that rate. This credit union has opened alot of branches as of late in our area and I was told by the guy helping us this was done to get new business and hopes that people will start banking with them. He thinks it will end very soon!

User avatar
unclescrooge
Posts: 3691
Joined: Thu Jun 07, 2012 7:00 pm

Re: Are you refinancing now?

Post by unclescrooge » Wed Aug 14, 2019 11:45 pm

Pessimist55 wrote:
Tue Aug 13, 2019 11:42 pm
I don't get why better needs to do a soft inquiry for a basic rate quote
Too invasive for me
seawolf21 wrote:
Tue Aug 13, 2019 11:20 am
Pessimist55 wrote:
Mon Aug 12, 2019 11:55 pm
seawolf21 wrote:
Mon Aug 12, 2019 1:35 pm
Currently locked for a 15-year 3% no cost.


Can you share name.of the Lender
Go to better.com to get a loan estimate. Then go to mortgage professor to get the best quote. If price is lower than better, obtain a loan estimate and send to better.com for their best price guarantee.
The rate is dependent on your score. It's also a way to gauge your real interest and turn away lookiloos.

mschurner
Posts: 36
Joined: Sun Sep 23, 2018 11:33 pm

Re: Are you refinancing now?

Post by mschurner » Thu Aug 15, 2019 1:09 am

bg5 wrote:
Wed Aug 14, 2019 7:38 pm
mschurner wrote:
Wed Aug 14, 2019 6:43 pm
bg5 wrote:
Wed Aug 14, 2019 12:43 pm
Well....I ended up pulling the trigger today. We refinanced our home that we own and we previously had a 30 year @ 4.375 and we still had 27 years to go. We owe around 236k on a home valued at 500k. We decided to refi to a 15 year loan at 2.87% and our payment will go up about $350 a month. It will save us around 113k in interest payments but the main reason for doing it is to make sure our home is paid off before retirement. I will be 53 and my wife will be 49 when its paid off.

The other factor is that we both max out our roth each year (12k combined) and between the two of us put around (20k combined) into a 457b account. We are also teachers with very stable incomes and we both will have pensions (pension system appears to be healthy but who knows) that are pretty generous.

We both agreed that investing money might work out better in the long term but we just really want that house paid off early as that will be the biggest obstacle that would prevent us from retiring early.

THE ONLY QUESTION I HAD IS IT COST US ABOUT $2500 in refi costs so I am not sure if that is bad or not....please let me know but overall a 2.87% interest rate was to good to pass up.

We used Arbor Financial Credit Union in Kalamazoo Michigan and they are offering a deal right now to attempt to get new business. We have used them for a while and have loved them for all their services.

Please let me know if those costs seem crazy high

You got solid rate for 15 year refi. Closing cost appears pretty reasonable. Did you pay anything for points to get that low rate?

I did not have to pay anything to get that rate. This credit union has opened alot of branches as of late in our area and I was told by the guy helping us this was done to get new business and hopes that people will start banking with them. He thinks it will end very soon!
Thank you for the information. Looks like membership is restricted to MI residents only. I'm going to call them tomorrow. Do you remember whether it was hard pull to open membership/account with them or just soft pull?

RobLyons
Posts: 426
Joined: Tue Oct 31, 2017 12:55 pm

Re: Are you refinancing now?

Post by RobLyons » Thu Aug 15, 2019 9:14 am

Thank you for the information. Looks like membership is restricted to MI residents only. I'm going to call them tomorrow. Do you remember whether it was hard pull to open membership/account with them or just soft pull?



Confirmed membership is restricted to those who live, work, or worship in Michigan.
Considering finding a place of worship in Michigan now...
:wink:
"Great parenting sets the foundation for a better world"

alter
Posts: 245
Joined: Thu Feb 26, 2015 11:27 pm
Location: Chicago

Re: Are you refinancing now?

Post by alter » Thu Aug 15, 2019 9:17 am

+1 on the spread between the 15 and 30 being low....there is almost no incentive, interest-wise to pick a 15year.

I have 12 years left on my 15 year fixed @ 2.875%....I doubt it will make sense for me to refinance anytime soon, if ever.

classicindexer
Posts: 66
Joined: Tue Apr 09, 2019 10:43 am

Re: Are you refinancing now?

Post by classicindexer » Thu Aug 15, 2019 9:46 am

alter wrote:
Thu Aug 15, 2019 9:17 am
+1 on the spread between the 15 and 30 being low....there is almost no incentive, interest-wise to pick a 15year.
How do you figure? I think in some cases a 15 year is still better if you're trying to pay less in total interest.

I am refinancing and borrowing $172K. 15 year term is 2.875% and 30 year term is 3.375% (points are only 0.090%).
15 year: Pymt $1,177.49. Total interest paid $39,947.74
30 year: Pymt $760.41. Total interest paid $101,745.97

Now if on a 30 year I paid it like a 15 year at $1,177.49 a month the total interest paid is $49,902.80. That's still $10K more interest paid in 15 years. If you want flexibility and a lower monthly payment then sure refi for a 30 year, in the long run you'll pay more in total interest.

alter
Posts: 245
Joined: Thu Feb 26, 2015 11:27 pm
Location: Chicago

Re: Are you refinancing now?

Post by alter » Thu Aug 15, 2019 10:07 am

classicindexer wrote:
Thu Aug 15, 2019 9:46 am
alter wrote:
Thu Aug 15, 2019 9:17 am
+1 on the spread between the 15 and 30 being low....there is almost no incentive, interest-wise to pick a 15year.
How do you figure? I think in some cases a 15 year is still better if you're trying to pay less in total interest.

I am refinancing and borrowing $172K. 15 year term is 2.875% and 30 year term is 3.375% (points are only 0.090%).
15 year: Pymt $1,177.49. Total interest paid $39,947.74
30 year: Pymt $760.41. Total interest paid $101,745.97

Now if on a 30 year I paid it like a 15 year at $1,177.49 a month the total interest paid is $49,902.80. That's still $10K more interest paid in 15 years. If you want flexibility and a lower monthly payment then sure refi for a 30 year, in the long run you'll pay more in total interest.
What I meant is interest rate-wise, not interest wise over the total loan. Of course with a 15 year you will pay less. It's why people choose them. But normally the spread on the interest rate between them is far more than now.

The spread between 15 and 30 year is only a quarter of a percent by my local bank....when I financed mine the spread was more like one and a half percent, if I recall correctly.

If I were refinancing now, I would've gone with 30 year fixed instead of 15 year just because a quarter percent is worth that flexibility.

barnaclebob
Posts: 3829
Joined: Thu Aug 09, 2012 10:54 am

Re: Are you refinancing now?

Post by barnaclebob » Thu Aug 15, 2019 10:24 am

Just closed last week on a 15 year at 3.375% from a 20 year at 4.125% that closed 12/2017. Rate was locked in a month ago. WA state, house value 1mil, loan 370k, closing costs ~2500, no appraisal needed. I'll need it down to under 2.5% to make another refi make sense.

prad81
Posts: 15
Joined: Wed Mar 15, 2017 10:34 pm

Re: Are you refinancing now?

Post by prad81 » Thu Aug 15, 2019 11:35 am

classicindexer wrote:
Wed Aug 14, 2019 3:29 pm
I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.
Great rate! Can you share the name of the credit union please?

classicindexer
Posts: 66
Joined: Tue Apr 09, 2019 10:43 am

Re: Are you refinancing now?

Post by classicindexer » Thu Aug 15, 2019 11:52 am

prad81 wrote:
Thu Aug 15, 2019 11:35 am
classicindexer wrote:
Wed Aug 14, 2019 3:29 pm
I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.
Great rate! Can you share the name of the credit union please?
Indded. :) Michigan Schools and Government Credit Union www.msgcu.org

Hope
Posts: 25
Joined: Tue Dec 30, 2014 1:57 pm

Re: Are you refinancing now?

Post by Hope » Fri Aug 16, 2019 5:22 pm

classicindexer wrote:
Thu Aug 15, 2019 11:52 am
prad81 wrote:
Thu Aug 15, 2019 11:35 am
classicindexer wrote:
Wed Aug 14, 2019 3:29 pm
I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.
Great rate! Can you share the name of the credit union please?
Indded. :) Michigan Schools and Government Credit Union www.msgcu.org
2.875% for 15 year is a great rate. I am being quoted 3.125% for 15 year with 6k closing costs in NY.

Independent George
Posts: 468
Joined: Wed Feb 17, 2016 12:13 pm

Re: Are you refinancing now?

Post by Independent George » Fri Aug 16, 2019 9:47 pm

Well, it looks like I can't get my appraisal waived. I originally purchased at peak bubble 2007, and am hovering right around 80% LTV right now; I had hoped that having over $60k in liquid assets on a $155k mortgage balance would be enough to have it waived. I know I shouldn't get cheap over a $450 appraisal fee when I stand to cut my interest this much, but I wouldn't be a Boglehead if I didn't want to squeeze every last dollar.

I plan on paying additional cash in if the appraisal comes in low, so I actually don't care about what value they come up with; it's more the principle of paying for an appraisal when I already have enough assets (including my Roth IRA) to pay the entire balance today. It just seems like a waste of time and money.

seawolf21
Posts: 288
Joined: Tue Aug 05, 2014 7:33 am

Re: Are you refinancing now?

Post by seawolf21 » Sat Aug 17, 2019 8:31 am

Hope wrote:
Fri Aug 16, 2019 5:22 pm
classicindexer wrote:
Thu Aug 15, 2019 11:52 am
prad81 wrote:
Thu Aug 15, 2019 11:35 am
classicindexer wrote:
Wed Aug 14, 2019 3:29 pm
I just locked with my local credit union 15 year fixed 2.875% rate w/$170 for 0.099% points for $172K loan on $285K value. They said their system says appraisal should be waived so closing costs with w/o appraisal fee + their lender credit should be $1,263 which I'll pay out of pocket.

Currently have a 4.625% 25 year loan for $194K which has 20 years left.
Great rate! Can you share the name of the credit union please?
Indded. :) Michigan Schools and Government Credit Union www.msgcu.org
2.875% for 15 year is a great rate. I am being quoted 3.125% for 15 year with 6k closing costs in NY.
Can’t really compare NY refi with other states. NY is not friendly for refi. You either have to go with same lender as before or pay mortgage tax when refi with new lender. The current lender knows that so you will never get rate/terms lower than other states.

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