Refinance Mega Thread

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Shael_AT
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Re: Refinance Mega Thread

Post by Shael_AT »

UPDATE

Locked in and going through closing and escrow stuff.

Appraisal when we purchased 1 year ago (as of next week): 800
Appraisal when we locked in: 900 (no appraiser needed, I told Chase I think its 900, they agree'd, looks like Redfin and Zillow estimating 860-875 werent far off, the most generous range is 907 max value)

TLV is much better now. :twisted:

No cost closing. Did not buy points. We get $1,667 back from chase, that's after property tax and all other total loan fee's together. Our property taxes are rough. Wished the $ back was higher. Usually, I would go line by line and argue the fee's and what not, but not this time. Not when we're getting paid to pay less.

3.167% on a 30 year loan, 656000 outstanding balance, 900000 appraisal, literally walking on clouds now. We're expecting a substantial savings per month. :sharebeer

So glad I decided to do this. When I told my Chase rep that I could get a deal that costs me nothing versus the original 7k they offered me, and bought proof from 3 other companies, they matched and waived appraisal all together. I'm still shell shocked that they just "Believed Me" and upped the value of our home by 100k. Fully believe people here when they say to shop around. Enormous deal.

Then again, this is [Seattle East Side] by [Software Company], a house 2 doors down matching ours almost precisely was offered at 807 and sold at 855 in <24 hours on Redfin. Sqft, Style, plot size, build date, rooms, et. all matched, just inverted floor plan.

Cheers all.
Nappyloxs
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Re: Refinance Mega Thread

Post by Nappyloxs »

What is happening with cash-out refi?

Our house is worth $675k at right now. We owe $378k or so. We bought that house in 2018 knowing it needs renovations as everything is original from 1980s.

We want to take out about $150k to renovate. Since it is cash-out, and probably jumbo, I am guessing the rate will be higher than regular refi. I figure I will wait a few months and then refi again regular rates. I may even pay down the mortgage a bit, so it is not a jumbo if numbers work out.

Anyone have luck with cash-out refi, lately?

I am thinking worst case scenario I could try a local credit union and see what happens.

TIA
JBTX
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Re: Refinance Mega Thread

Post by JBTX »

BrandonBogle wrote: Sun Jun 07, 2020 1:19 pm
ma21n2 wrote: Sun Jun 07, 2020 11:34 am I’m refinancing with Better.com now, which initially required escrow for more lender credit. I asked them to match a Loan Estimate from a different lender, which didn’t require escrow. Better.com beat the LE by $500, but still required escrow. I asked them to match the no-escrow part as well, and they were able to do that (i.e., they beat it by $500 and no escrow + AMEX $2500 credit). Been pretty happy with Better.com thus far.
I’ll second this. Better.com didn’t beat my other lender $150 more, but still had on there requiring escrow. I then told them I’m disappointed Better is effectively charging a surcharge (high points cost) to waive escrow when the competing offer was without an escrow. They came back with it waived.

Note, I did this after I was in underwriting and locked without escrow. I wrote in saying I want to switch to option XYZ above that is cheaper b/c of escrow and mentioned the disappointment in that email. They gave me that lower point cost ($404 less) without adding escrow.
How do you know if you are eligible for amex $2500. I called amex and they said you would get an email if eligible but I have no such email. Nothing on my amex site when I log in. When I applied for better through the amex promotional site I don't recall anything indicating a was eligible for credit. People at better didn't know either.

Apparently quicken loans is also providing amex credit.
njdealguy
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Re: Refinance Mega Thread

Post by njdealguy »

Nappyloxs wrote: Mon Jun 08, 2020 7:28 pm What is happening with cash-out refi?

Our house is worth $675k at right now. We owe $378k or so. We bought that house in 2018 knowing it needs renovations as everything is original from 1980s.

We want to take out about $150k to renovate. Since it is cash-out, and probably jumbo, I am guessing the rate will be higher than regular refi. I figure I will wait a few months and then refi again regular rates. I may even pay down the mortgage a bit, so it is not a jumbo if numbers work out.

Anyone have luck with cash-out refi, lately?

I am thinking worst case scenario I could try a local credit union and see what happens.

TIA
I think you can get the best rates by keeping it as a conforming loan of no more than 510k. I'm closing this week with Better.com after having them price match a loan estimate I got from Loan Depot, after factoring the Amex credit and waived appraisal fee, my net closing costs not counting prepaid escrow is -1250, for a 30 year loan with 250k cashout and a total loan balance of 505k, 2.875 interest rate.
lakja
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Re: Refinance Mega Thread

Post by lakja »

I’d love to know how everyone is getting these crazy low 30 year, no cost mortgage rates. I shopped around a few different places, and the best I was able to get was 2.75% 15-year with $1700 closing cost, no escrow accounts required.

The $1700 basically covers the transfer taxes and the title insurance. Is the definition of no cost in this thread just relating to a zero-point, no origination loan? For what it’s worth, house is worth $610k and mortgage value is $380k.

Where should I be looking? I’m probably about two weeks out from closing, but I’d be willing to go with a new lender if I can get a 15-year around 2.5% or a true no-cost 30 year for 2.75%. Better doesn’t originate in Virginia.
Last edited by lakja on Mon Jun 08, 2020 8:36 pm, edited 1 time in total.
Nappyloxs
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Re: Refinance Mega Thread

Post by Nappyloxs »

njdealguy wrote: Mon Jun 08, 2020 8:13 pm
Nappyloxs wrote: Mon Jun 08, 2020 7:28 pm What is happening with cash-out refi?

Our house is worth $675k at right now. We owe $378k or so. We bought that house in 2018 knowing it needs renovations as everything is original from 1980s.

We want to take out about $150k to renovate. Since it is cash-out, and probably jumbo, I am guessing the rate will be higher than regular refi. I figure I will wait a few months and then refi again regular rates. I may even pay down the mortgage a bit, so it is not a jumbo if numbers work out.

Anyone have luck with cash-out refi, lately?

I am thinking worst case scenario I could try a local credit union and see what happens.

TIA
I think you can get the best rates by keeping it as a conforming loan of no more than 510k. I'm closing this week with Better.com after having them price match a loan estimate I got from Loan Depot, after factoring the Amex credit and waived appraisal fee, my net closing costs not counting prepaid escrow is -1250, for a 30 year loan with 250k cashout and a total loan balance of 505k, 2.875 interest rate.
Thanks. You make a really good point. I should stay under the jumbo. I can swing the difference in the renovation costs. I will have to take a look at the amex deal.
njdealguy
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Re: Refinance Mega Thread

Post by njdealguy »

lakja wrote: Mon Jun 08, 2020 8:33 pm I’d love to know how everyone is getting these crazy low 30 year, no cost mortgage rates. I shopped around a few different places, and the best I was able to get was 2.75% 15-year with $1700 closing cost, no escrow accounts required.

The $1700 basically covers the transfer taxes and the title insurance. Is the definition of no cost in this thread just relating to a zero-point, no origination loan? For what it’s worth, house is worth $610k and mortgage value is $380k.

Where should I be looking? I’m probably about two weeks out from closing, but I’d be willing to go with a new lender if I can get a 15-year around 2.5% or a true no-cost 30 year for 2.75%. Better doesn’t originate in Virginia.
The very last sentence of your post explains your very first one! Better with Amex promo and price matching is a super crazy deal that I would've thought too good to be true before learning about it.

Unfortunately with your state not having it would just look at other online lenders like loan depot, lenders, etc.

Rates have creeped up a bit since last week though
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

nova148 wrote: Mon Jun 08, 2020 5:59 pm My principal amount is remaining the same.
Ahh. That explains it. It isn’t the payoff amount being financed, just the outstanding principal, which wouldn’t account for the current month’s payment. Gotcha.
BrandonBogle wrote: Mon Jun 08, 2020 4:54 pm
nova148 wrote: Mon Jun 08, 2020 4:25 pm While the above adds up and is consistent with a no-cost refi, the way it is reflected is a bit odd. For example, I am paying broker compensation (I used a mortgage broker) in Section A which is offset by lender paying my interest (Section F) and contributing to my escrow (Section G).

Is this normal? Should I be concerned?

P.S: The lender is paying for everything listed in Section B and Section E (Taxes), which makes sense to me.
Normal, no. It is odd. I wouldn’t necessarily be concerned though if everything balances out. Another poster recently shared their closing disclosure and the lender had a very weird way of writing up the lender credits, but that was still clearer than this.
Darn autocorrect. I bolded my correction. I wouldn’t worry about this. Sorry about the confusion.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

JBTX wrote: Mon Jun 08, 2020 7:57 pm
BrandonBogle wrote: Sun Jun 07, 2020 1:19 pm
ma21n2 wrote: Sun Jun 07, 2020 11:34 am I’m refinancing with Better.com now, which initially required escrow for more lender credit. I asked them to match a Loan Estimate from a different lender, which didn’t require escrow. Better.com beat the LE by $500, but still required escrow. I asked them to match the no-escrow part as well, and they were able to do that (i.e., they beat it by $500 and no escrow + AMEX $2500 credit). Been pretty happy with Better.com thus far.
I’ll second this. Better.com didn’t beat my other lender $150 more, but still had on there requiring escrow. I then told them I’m disappointed Better is effectively charging a surcharge (high points cost) to waive escrow when the competing offer was without an escrow. They came back with it waived.

Note, I did this after I was in underwriting and locked without escrow. I wrote in saying I want to switch to option XYZ above that is cheaper b/c of escrow and mentioned the disappointment in that email. They gave me that lower point cost ($404 less) without adding escrow.
How do you know if you are eligible for amex $2500. I called amex and they said you would get an email if eligible but I have no such email. Nothing on my amex site when I log in. When I applied for better through the amex promotional site I don't recall anything indicating a was eligible for credit. People at better didn't know either.

Apparently quicken loans is also providing amex credit.
Amex with Better @ https://www.americanexpress.com/us/camp ... ns/better/

Amex with Quicken/Rocket @ https://www.americanexpress.com/us/camp ... ken-loans/
lakja
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Re: Refinance Mega Thread

Post by lakja »

bgaspard wrote: Mon Jun 08, 2020 4:14 pm I live in the northern Virginia area and am considering refinancing options. Our current lender is navy federal credit union and am considering refinancing thru them. Also looking at pennymac as a possible lender. Are there other lenders we should look at that service Virginia? Doesn’t seem to be an easy way to find the possible lenders for our area.
I live in Northern VA too. Best I could find was 2.625%, 15-year. I ended up taking a 1/8th point hit to remove escrow and to subordinate my HELOC. AIMLOAN was the cheapest and they’ve been extremely responsive. I called around 5-6 different companies and three were local. Online sites were lower than local guys, plus online companies will send closing papers to your house via notary, super convenient.
mt2k
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Re: Refinance Mega Thread

Post by mt2k »

nova148 wrote: Mon Jun 08, 2020 5:59 pm
I do find the way numbers are laid out to be odd however I can't find anything concrete to not go through the transaction. Hence, requesting a second pair of eyes.
Your last payment was on 5/1 and your closing date is sometime in June. If your cash to close matches as below and no additions to the loan amount, I wouldn't be worried how they lay down the numbers
Cash to close = Escrow + Prepaid interest to new lender (closing date to 6/30) + Interest due to old lender (5/1 to closing date)
dsmil
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Re: Refinance Mega Thread

Post by dsmil »

lakja wrote: Mon Jun 08, 2020 8:33 pm I’d love to know how everyone is getting these crazy low 30 year, no cost mortgage rates. I shopped around a few different places, and the best I was able to get was 2.75% 15-year with $1700 closing cost, no escrow accounts required.

The $1700 basically covers the transfer taxes and the title insurance. Is the definition of no cost in this thread just relating to a zero-point, no origination loan? For what it’s worth, house is worth $610k and mortgage value is $380k.

Where should I be looking? I’m probably about two weeks out from closing, but I’d be willing to go with a new lender if I can get a 15-year around 2.5% or a true no-cost 30 year for 2.75%. Better doesn’t originate in Virginia.
A no-cost refinance to me is one where lender credits cover title costs/taxes/fees. Prepaids/escrows are irrelevant. For me, those fees are $1,100 on my pending refinance. I went with better.com but keystonefunding.com was my best other offer before better.com beat them. I think it's quite possible that they are at 2.5% for a 15 year.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

dsmil wrote: Tue Jun 09, 2020 9:08 am
lakja wrote: Mon Jun 08, 2020 8:33 pm I’d love to know how everyone is getting these crazy low 30 year, no cost mortgage rates. I shopped around a few different places, and the best I was able to get was 2.75% 15-year with $1700 closing cost, no escrow accounts required.

The $1700 basically covers the transfer taxes and the title insurance. Is the definition of no cost in this thread just relating to a zero-point, no origination loan? For what it’s worth, house is worth $610k and mortgage value is $380k.

Where should I be looking? I’m probably about two weeks out from closing, but I’d be willing to go with a new lender if I can get a 15-year around 2.5% or a true no-cost 30 year for 2.75%. Better doesn’t originate in Virginia.
A no-cost refinance to me is one where lender credits cover title costs/taxes/fees. Prepaids/escrows are irrelevant. For me, those fees are $1,100 on my pending refinance. I went with better.com but keystonefunding.com was my best other offer before better.com beat them. I think it's quite possible that they are at 2.5% for a 15 year.
Agreed. I believe that has been brought up before in this very thread. No-cost doesn't mean no-lender-fees. No-cost means the lender (or a 3rd party) cover everything except prepaid interest (Section F) and escrow (Section G). No-lender-fees means no Section A costs except potentially points.
Rayandron
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Re: Refinance Mega Thread

Post by Rayandron »

frankandbeans wrote: Thu Jun 04, 2020 7:36 pm
Rayandron wrote: Thu Jun 04, 2020 7:08 pm Also in the process of refinancing and wanted to do a sanity check. Currently have a 3.875% 30-year fixed with a mid 700s balance from mid-2018. NFCU is offering 3.25% with:
  • $0 lender fees
  • $3k in 3rd party fees ($1460 title lender's coverage, $470 settlement attorney, $350 title service fee, & $640 appraisal (the last of which might get waived)
  • $2k in government fees
  • $7k of pre-paids/escrows
I've called Chase, an independent broker, and 1 or 2 other places and haven't found anybody else with a lower interest rate at no points (~820 credit score to the extent that matters). I'm getting a 1 year breakeven on Nerdwallet's refinance calculator if I put the parameters in correctly. I'm a bit jealous when I see lots of folks getting sub-3% rates on their non-jumbo loans, but that's just the way the jumbo market is right now I guess. Regardless, this is still a no-brainer right?
To answer your actual question, I wouldn't quite say it's a no brainer because you'll be OOP $5k and so that'll be a cost you have to absorb if the jumbo market normalizes and goes back to somewhere near parity with the conventional market, and causes you to want to refi again in, say, six months. For reference, I locked a jumbo refi at 3.125 with a credit covering all costs in early March, going from a 3.75. That to me was a no brainer. This, I would say is reasonable but not a no brainer. It would also be reasonable to wait and keep shopping and try to find something with credits to cover costs or with a lower rate.
Thanks for pushing me to shop more. I've been going back and forth with Chase & North Pointe and am down to 3.125% with ~$560 of total costs (govt taxes/fees + 3rd party fees - lender credits). If the appraisal gets waived it will be a no-cost ref-fi or very close. I feel a bit bad about wasting the loan officers' time with the multiple "The other company offered X & Y, can you beat it?" conversations, but so far it's resulted in several thousand dollars in cost reduction for a few phone calls and emails, so I can't justify not doing it either.
frankandbeans
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Re: Refinance Mega Thread

Post by frankandbeans »

Rayandron wrote: Tue Jun 09, 2020 10:21 am
Thanks for pushing me to shop more. I've been going back and forth with Chase & North Pointe and am down to 3.125% with ~$560 of total costs (govt taxes/fees + 3rd party fees - lender credits). If the appraisal gets waived it will be a no-cost ref-fi or very close. I feel a bit bad about wasting the loan officers' time with the multiple "The other company offered X & Y, can you beat it?" conversations, but so far it's resulted in several thousand dollars in cost reduction for a few phone calls and emails, so I can't justify not doing it either.
That's great! Sounds like you're down to no-brainer territory. And I wouldn't feel bad. They understand it's a "cost of doing business" thing and I think it's actually better to give them the chance to win your business than to just ghost them.

FWIW, I have one mortgage with Chase and closing with Northpointe (on another property) on Saturday, and I have only positive things to say about both so far.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

frankandbeans wrote: Tue Jun 09, 2020 10:32 am
Rayandron wrote: Tue Jun 09, 2020 10:21 am
Thanks for pushing me to shop more. I've been going back and forth with Chase & North Pointe and am down to 3.125% with ~$560 of total costs (govt taxes/fees + 3rd party fees - lender credits). If the appraisal gets waived it will be a no-cost ref-fi or very close. I feel a bit bad about wasting the loan officers' time with the multiple "The other company offered X & Y, can you beat it?" conversations, but so far it's resulted in several thousand dollars in cost reduction for a few phone calls and emails, so I can't justify not doing it either.
That's great! Sounds like you're down to no-brainer territory. And I wouldn't feel bad. They understand it's a "cost of doing business" thing and I think it's actually better to give them the chance to win your business than to just ghost them.

FWIW, I have one mortgage with Chase and closing with Northpointe (on another property) on Saturday, and I have only positive things to say about both so far.
Yup. Take the 3.125% and $560 cost with whomever offered it and call it a day. Don’t let perfect be the enemy of good!
xerxes101
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Re: Refinance Mega Thread

Post by xerxes101 »

lakja wrote: Mon Jun 08, 2020 9:58 pm
bgaspard wrote: Mon Jun 08, 2020 4:14 pm I live in the northern Virginia area and am considering refinancing options. Our current lender is navy federal credit union and am considering refinancing thru them. Also looking at pennymac as a possible lender. Are there other lenders we should look at that service Virginia? Doesn’t seem to be an easy way to find the possible lenders for our area.
I live in Northern VA too. Best I could find was 2.625%, 15-year. I ended up taking a 1/8th point hit to remove escrow and to subordinate my HELOC. AIMLOAN was the cheapest and they’ve been extremely responsive. I called around 5-6 different companies and three were local. Online sites were lower than local guys, plus online companies will send closing papers to your house via notary, super convenient.
I started my refi process with Navy Federal back in Feb. of this year, but in my experience they were super slow...it could be because of COVID-19 or that they are simply overwhelmed by the number of applications...but overall I did not have a good experience with them unfortunately...it's really too bad because I usually only like to do business with credit unions...but in this case I was disappointed.
Last edited by xerxes101 on Tue Jun 09, 2020 1:17 pm, edited 1 time in total.
lakja
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Re: Refinance Mega Thread

Post by lakja »

xerxes101 wrote: Tue Jun 09, 2020 12:32 pm
lakja wrote: Mon Jun 08, 2020 9:58 pm
bgaspard wrote: Mon Jun 08, 2020 4:14 pm I live in the northern Virginia area and am considering refinancing options. Our current lender is navy federal credit union and am considering refinancing thru them. Also looking at pennymac as a possible lender. Are there other lenders we should look at that service Virginia? Doesn’t seem to be an easy way to find the possible lenders for our area.
I live in Northern VA too. Best I could find was 2.625%, 15-year. I ended up taking a 1/8th point hit to remove escrow and to subordinate my HELOC. AIMLOAN was the cheapest and they’ve been extremely responsive. I called around 5-6 different companies and three were local. Online sites were lower than local guys, plus online companies will send closing papers to your house via notary, super convenient.
I started my refi process with Navy Federal back in Feb. of this year, but in my experience they were super slow...it could be because of COVID-19 or that they are simply overwhelmed by the number of applications...but overall I did not have a good experience with them unfortunately...it's really too bead because I usually only like to do business with credit unions...but in this case I was disappointed.
I agree. I wouldn’t consider NFCU for refinancing. They’re not competitive on rates and are notoriously slow with the process.
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

. Don’t let perfect be the enemy of good!
[/quote]

Wow, This Quote was meant for me. Not just with the refi process. But in general with my life. Thank you
jheaps
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Re: Refinance Mega Thread

Post by jheaps »

Posting my question again as i did not get any replies on it. I am in process of refinance with a new lender. When they ran credit check, my old lender notified me that a credit check for mortgage was done on me. I am not working with my old lender this time(and they sold loan to another bank) so why would they be watching my credit report? Is this a normal business practice?
Armoured
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Re: Refinance Mega Thread

Post by Armoured »

jheaps wrote: Tue Jun 09, 2020 1:29 pm Posting my question again as i did not get any replies on it. I am in process of refinance with a new lender. When they ran credit check, my old lender notified me that a credit check for mortgage was done on me. I am not working with my old lender this time(and they sold loan to another bank) so why would they be watching my credit report? Is this a normal business practice?
We were contacted by other leaders once our credit was checked/pulled for a refinance. It didn't effect our credit scores or the refinancing process. This is the first time that we received unsolicited calls from mortgage brokers or loan officers (our loan was closed in March).
InducedTraffic
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Re: Refinance Mega Thread

Post by InducedTraffic »

Thought I’d share our recent experience on a refi.

Submitted the inquiry beginning of April with Police and Fire Federal Credit Union (PA) and closed today.

20 year @ 3.125. No closing costs or fees.

We originally locked in at 3.375, they reduced the rate to 3.25 during underwriting as rates dropped and then reduced it again to 3.125 when we got the final disclosure to match their current rates.

Very easy and painless process with them - definitely would recommend.
mt2k
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Re: Refinance Mega Thread

Post by mt2k »

InducedTraffic wrote: Tue Jun 09, 2020 7:33 pm Thought I’d share our recent experience on a refi.

Submitted the inquiry beginning of April with Police and Fire Federal Credit Union (PA) and closed today.

20 year @ 3.125. No closing costs or fees.

We originally locked in at 3.375, they reduced the rate to 3.25 during underwriting as rates dropped and then reduced it again to 3.125 when we got the final disclosure to match their current rates.

Very easy and painless process with them - definitely would recommend.
That's awesome.. They reduced the rate twice on their own!!
Anonymous Coward
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Re: Refinance Mega Thread

Post by Anonymous Coward »

It's been about ten years since I last refinanced. Recently, I contacted a broker and asked if they would be willing to provide access to the rate sheet on the day of the lock. In years past, this was sort of an acid test for me; if the broker agreed, and everything else was agreeable, we would proceed. This broker told us "we no longer use rate sheets, we have an automated pricing engine."

Am I living in the past here? Is this now the standard operating procedure for the industry?
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Anonymous Coward wrote: Tue Jun 09, 2020 8:58 pm It's been about ten years since I last refinanced. Recently, I contacted a broker and asked if they would be willing to provide access to the rate sheet on the day of the lock. In years past, this was sort of an acid test for me; if the broker agreed, and everything else was agreeable, we would proceed. This broker told us "we no longer use rate sheets, we have an automated pricing engine."

Am I living in the past here? Is this now the standard operating procedure for the industry?
They may not use a rate sheet, but when they run you through the automated pricing engine, they do get a rate table specific to you.
hammond
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Re: Refinance Mega Thread

Post by hammond »

We are in the midst of refinancing 700k at 3% 15 year with <= 50% LTV and 720+ credit score. This is in California. Closing cost is ~2k (which is trivial). Current rate is 4.325% at 30 years.
beginner
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Re: Refinance Mega Thread

Post by beginner »

Locked in 2.5% 15 year from Lenderfi. Credits should cover closing cost so I will only be paying prepaids at closing.

I am coming from a 3% 15 year that I refi'd about 6 months ago with lender fi also.
mlb491
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Re: Refinance Mega Thread

Post by mlb491 »

Hello, I am considering a first time refinance with the primary goal of lowering my payments per month and secondary goal of not increasing cost over the life of the loan.

Scenario:
Location: CA, property value 1.2m, credit 800
Original Loan 625k @ 3.625% fixed originated on 3/2013, 30 years.
Current principal is 530k. Paying $2852/mo P+I, 23 years left.
Proposed rate: 3.03% on 530k loan, $2273.25/mo P+I 30 years (A savings of $578.85/mo). $2708/mo P+I if I pay off the loan in 23 years (A savings of $144/mo)

Refinance Costs:
Pay 3k for fees and title, $6700 for taxes, prepaid insurance and escrow account (I currently have an escrow account). Since I will get a refund from my current loan provider in the future, I consider my OOP is 3K to do this refinance.

Analysis:
Here are my refinance calculations, based upon a 540k loan (rolling escrow and prepaid insurance and taxes into the total):
Maximizing Savings over life of loan:
It will take 1.7 months to recuperate 3k closing costs with the savings per month. ($144 per month)
I will save $144 per month and 39k over the life of the loan if I pay it off in 23 years.

Lowering monthly payments:
I will end up paying 31k more over the life of the loan if I decide to lower my monthly mortgage by $578.85 and pay it off in 30 years. The Break even point is at year 21 of the loan. After year 21, I start to pay more over the life of the mortgage.

Break-even (nerdwallet calculator):
I can reduce my monthly payments to $2419/mo (a savings of $433/mo) and save 3457.00 over the life of the loan. It will take 27 years to pay off the mortgage.

Conclusion
I am opting for the third option (break-even point) which will lower my monthly payments by 15.18% without increasing the overall cost of the loan. Any advice on this plan?
mt2k
Posts: 51
Joined: Thu May 21, 2020 8:13 am

Re: Refinance Mega Thread

Post by mt2k »

mlb491 wrote: Wed Jun 10, 2020 2:12 am Hello, I am considering a first time refinance with the primary goal of lowering my payments per month and secondary goal of not increasing cost over the life of the loan.

Scenario:
Location: CA, property value 1.2m, credit 800
Original Loan 625k @ 3.625% fixed originated on 3/2013, 30 years.
Current principal is 530k. Paying $2852/mo P+I, 23 years left.
Proposed rate: 3.03% on 530k loan, $2273.25/mo P+I 30 years (A savings of $578.85/mo). $2708/mo P+I if I pay off the loan in 23 years (A savings of $144/mo)

Refinance Costs:
Pay 3k for fees and title, $6700 for taxes, prepaid insurance and escrow account (I currently have an escrow account). Since I will get a refund from my current loan provider in the future, I consider my OOP is 3K to do this refinance.

Analysis:
Here are my refinance calculations, based upon a 540k loan (rolling escrow and prepaid insurance and taxes into the total):
Maximizing Savings over life of loan:
It will take 1.7 months to recuperate 3k closing costs with the savings per month. ($144 per month)
I will save $144 per month and 39k over the life of the loan if I pay it off in 23 years.

Lowering monthly payments:
I will end up paying 31k more over the life of the loan if I decide to lower my monthly mortgage by $578.85 and pay it off in 30 years. The Break even point is at year 21 of the loan. After year 21, I start to pay more over the life of the mortgage.

Break-even (nerdwallet calculator):
I can reduce my monthly payments to $2419/mo (a savings of $433/mo) and save 3457.00 over the life of the loan. It will take 27 years to pay off the mortgage.

Conclusion
I am opting for the third option (break-even point) which will lower my monthly payments by 15.18% without increasing the overall cost of the loan. Any advice on this plan?
Its the right choice if your goal is lowering the monthly payment (as much as possible) without increasing cost over the life of the loan.

My preference is lowering the monthly payment without increasing the life of the loan. In that case monthly saving is less but the cost of the loan over life is also less.
Fatusr
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Re: Refinance Mega Thread

Post by Fatusr »

hammond wrote: Tue Jun 09, 2020 10:49 pm We are in the midst of refinancing 700k at 3% 15 year with <= 50% LTV and 720+ credit score. This is in California. Closing cost is ~2k (which is trivial). Current rate is 4.325% at 30 years.
Since you are in California, check owning.com. They are offering 2.75% for 15 years with 0 closing costs.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

mlb491 wrote: Wed Jun 10, 2020 2:12 amAnalysis:
Here are my refinance calculations, based upon a 540k loan (rolling escrow and prepaid insurance and taxes into the total):
Maximizing Savings over life of loan:
It will take 1.7 months to recuperate 3k closing costs with the savings per month. ($144 per month)
I will save $144 per month and 39k over the life of the loan if I pay it off in 23 years.
You are making a cash-flow calculation for recuperating your costs here, not interest savings. If your goal is to improve cash-flow, that is fine. But if you want to then pay the loan off in the same time frame as your old one or not pay more overall in the loan, cash-flow is not the right number to look at. Instead, look at interest savings.

On interest savings, you will save roughly $530k @ 0.595%, so roughly $3k in a year. So your break-even period/time to recuperate your closing costs, is about one year.

So that makes the decision to refi a good one. Then how long you want to pay it is a separate decision you need to make.
drizzleray
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Re: Refinance Mega Thread

Post by drizzleray »

Can a lender require a fee to provide a loan estimate if you've submitted a loan application? AHC Lending wants a fee to pull the credit report before they will provide the loan estimate.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

drizzleray wrote: Wed Jun 10, 2020 10:48 am Can a lender require a fee to provide a loan estimate if you've submitted a loan application? AHC Lending wants a fee to pull the credit report before they will provide the loan estimate.
Yes. Application fees are permitted, though uncommon. Usually, credit unions are the ones that charge app fees and they are usually very reasonable. The CU I just refi’d away from charges a $14 app fee to cover their credit report costs.
macher
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Re: Refinance Mega Thread

Post by macher »

Recently moved in a house that my wife inherited. Before we moved we completely renovated the house and told out a $75k loan for renovation. At that time we were only able to get a loan @ 4.99% for 15 years because it wasn’t a primary residence. We took the loan about 1 year ago. Home is worth $300k.

What are our options to get the best rate?
Snezz1e
Posts: 36
Joined: Wed Mar 14, 2012 11:48 am

Re: Refinance Mega Thread

Post by Snezz1e »

Closed on my Northpointe 250k 2.75% 15 year loan on May 29. Easy process, waived appraisal, just a lot of waiting. I applied/locked in on April 17.

I had a 2.875% 15 year before so not much of a rate reduction. I took the highest rate available to maximize lender credit. It was negative cost (profit) for me. They covered all closing costs and put about $1,800 towards prepaids/escrow. I spent less than 10 hours for entire process so it was a good payback per hour. Plus I was 4 years in on prior loan so it was a nice monthly payment reduction by stretching it out to 15 years again.

I'm hoping rates continue to go down and I can get a no cost refinance around 2.5% or negative cost at 2.625%.


My coworker also recently refinanced. Northpointe didn't have a good cash-out rate so she went with Amerisave. She applied on May 1 and closed May 15. A lot quicker than Northpointe and she was required to have an appraisal.
pkays
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Re: Refinance Mega Thread

Post by pkays »

beginner wrote: Tue Jun 09, 2020 10:52 pm Locked in 2.5% 15 year from Lenderfi. Credits should cover closing cost so I will only be paying prepaids at closing.

I am coming from a 3% 15 year that I refi'd about 6 months ago with lender fi also.
How much in credits did you receive? I am considering lenderfi for the same rate and period. Thx.
CaleJay
Posts: 6
Joined: Thu Oct 11, 2018 11:14 am

Re: Refinance Mega Thread

Post by CaleJay »

Just refinanced with UWM via a broker. Self employed so there were quite a few hoops to jump through but only took about 30 days, start to finish.
Home value of $720K with $360K mortgage. Went from 3.75% on a 30yr to 2.99% on a 30yr.

No cost to me besides standard prepaid taxes and insurance. Actually received a $300 credit.


Edit:
Forgot to say that I learned a ton from reading this thread and a big thank you to all the refi pros on this site!
Last edited by CaleJay on Wed Jun 10, 2020 5:23 pm, edited 1 time in total.
ciscovp
Posts: 123
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Re: Refinance Mega Thread

Post by ciscovp »

I am just seeking out quotes today from various companies. I have received a couple of rates. No lock. So rates are not firm.

Scenario:
Location: MD, property value 790k credit 800
Original Loan 495k @ 3.5% fixed originated on 12/2012 (refi), 30 years.
Current principal is 415k. Paying $2202/mo P+I, 23 years left.

Option 1
Proposed rate 1: 2.875% (APR: 2.896%) on 415k loan, $1734/mo P+I 30 years (A savings of $468/mo).
Refinance Costs:
Pay 2.2k for fees (lender's and 3rd party) and title. No escrow. I currently don't have an escrow. However, it says estimated cash at closing of $-407.00 I noticed that he loan amount increased to 418k. The funny thing is that i asked for no cash out.

Option 2.
This is 20 year loan with the same vendor as above the same rate of 2.875% (APR 2.905%). Seems that I should not consider this one because of the same rate as the above. Closing costs are the same as above.

Option 3
Proposed rate 1: 3.00% on 415k loan, $1758/mo P+I 30 years (A savings of $444/mo).
Refinance Costs:
I get a credit of $2058 which offsets the closing cost.


So which is the better option? It seems Option 1 but moving the cost to the balance is something I don't approve. Or is that ok given the rate i am getting?
pindevil
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Re: Refinance Mega Thread

Post by pindevil »

When is the right time to tell a lender you are no longer interested after applying? I have a loan application I started May 5th and locked shortly after. They haven't given me a closing date yet. I haven't paid any fees to them. Meanwhile I locked with Better.com last week and today they are getting ready to close.

Is there any reason to keep the application active with the first company? There are lower rates with less fees available today.
VCC
Posts: 95
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Re: Refinance Mega Thread

Post by VCC »

For 15 yr loans at 510,400 & under, Owning is showing 2.375% no closing costs. Lenderfi 30yr is at 2.875% no closing costs & 20 yr is at 2.75% no closing costs.
beginner
Posts: 38
Joined: Sat Dec 10, 2011 1:32 am
Location: TX

Re: Refinance Mega Thread

Post by beginner »

pkays wrote: Wed Jun 10, 2020 1:25 pm
beginner wrote: Tue Jun 09, 2020 10:52 pm Locked in 2.5% 15 year from Lenderfi. Credits should cover closing cost so I will only be paying prepaids at closing.

I am coming from a 3% 15 year that I refi'd about 6 months ago with lender fi also.
How much in credits did you receive? I am considering lenderfi for the same rate and period. Thx.

$2470
Broadway2018
Posts: 305
Joined: Sat May 13, 2017 3:34 pm

Re: Refinance Mega Thread

Post by Broadway2018 »

Just refinanced with LenderFi at 3% fixed for 30 years on a condo and jumbo loan with no cost (just prepaids). Also, was able to waive the appraisal. The person I worked with was fantastic and super fast in getting this done in less than 30 minutes!

Went from 3.5% to 3% saving ~$200 a month.
ellvizzle
Posts: 25
Joined: Sun Aug 06, 2017 9:18 pm

Re: Refinance Mega Thread

Post by ellvizzle »

Had a very good experience with better.com, despite not knowing about that Amex deal I now see mentioned in the thread. From lock to close 3 weeks, and then payoff finalized no problem. Was only 1 year into a 30 year at 4%, which I thought was a good rate a year ago. Refi at 2.875% for a 30 year. ~$2200 lender credits which more than covered A+B+C that totaled ~$1500. The portal was really convenient and I felt like I always knew who I could email or call if I had a question. In order to get this rate I did have to shop around and provide a competitive offer.
ChiKid24
Posts: 333
Joined: Fri Aug 09, 2019 3:43 pm

Re: Refinance Mega Thread

Post by ChiKid24 »

ciscovp wrote: Wed Jun 10, 2020 4:54 pm I am just seeking out quotes today from various companies. I have received a couple of rates. No lock. So rates are not firm.

Scenario:
Location: MD, property value 790k credit 800
Original Loan 495k @ 3.5% fixed originated on 12/2012 (refi), 30 years.
Current principal is 415k. Paying $2202/mo P+I, 23 years left.

Option 1
Proposed rate 1: 2.875% (APR: 2.896%) on 415k loan, $1734/mo P+I 30 years (A savings of $468/mo).
Refinance Costs:
Pay 2.2k for fees (lender's and 3rd party) and title. No escrow. I currently don't have an escrow. However, it says estimated cash at closing of $-407.00 I noticed that he loan amount increased to 418k. The funny thing is that i asked for no cash out.

Option 2.
This is 20 year loan with the same vendor as above the same rate of 2.875% (APR 2.905%). Seems that I should not consider this one because of the same rate as the above. Closing costs are the same as above.

Option 3
Proposed rate 1: 3.00% on 415k loan, $1758/mo P+I 30 years (A savings of $444/mo).
Refinance Costs:
I get a credit of $2058 which offsets the closing cost.


So which is the better option? It seems Option 1 but moving the cost to the balance is something I don't approve. Or is that ok given the rate i am getting?
My numbers are a little different, but similar situation in that i could take a lower rate with no credit or .125% higher with a nice credit. I opted for the latter, which made it a true no cost loan. In your case you get $2,058 today and sacrifice an additional $24 a month for 30 years. So it will take about 7 years for option 1 to pay off. If you think you'll be in the house for a shorter period than that, or believe you may be able to refinance at an even lower rate at some point in the next 7 years, then go with option 3. Gives you much more flexibility in my mind.
dsmil
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Re: Refinance Mega Thread

Post by dsmil »

ciscovp wrote: Wed Jun 10, 2020 4:54 pm I am just seeking out quotes today from various companies. I have received a couple of rates. No lock. So rates are not firm.

Scenario:
Location: MD, property value 790k credit 800
Original Loan 495k @ 3.5% fixed originated on 12/2012 (refi), 30 years.
Current principal is 415k. Paying $2202/mo P+I, 23 years left.

Option 1
Proposed rate 1: 2.875% (APR: 2.896%) on 415k loan, $1734/mo P+I 30 years (A savings of $468/mo).
Refinance Costs:
Pay 2.2k for fees (lender's and 3rd party) and title. No escrow. I currently don't have an escrow. However, it says estimated cash at closing of $-407.00 I noticed that he loan amount increased to 418k. The funny thing is that i asked for no cash out.

Option 2.
This is 20 year loan with the same vendor as above the same rate of 2.875% (APR 2.905%). Seems that I should not consider this one because of the same rate as the above. Closing costs are the same as above.

Option 3
Proposed rate 1: 3.00% on 415k loan, $1758/mo P+I 30 years (A savings of $444/mo).
Refinance Costs:
I get a credit of $2058 which offsets the closing cost.


So which is the better option? It seems Option 1 but moving the cost to the balance is something I don't approve. Or is that ok given the rate i am getting?
I agree with the other poster that #3 is the best. I never like giving money to the bank when I don't have to, and a $4k difference in costs on 1/8 of a point is a nice spread. Keep it no-cost and stay aggressive whenever it's helpful!
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

silly question:

If let say you receive a lender credit of $2,500. and closing cost was $2,000. And No Escrow.

Does that mean the lender will send us a check for $500?

thanks

EDIT: nevermind found my answer. Unable to delete post.
ciscovp
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Re: Refinance Mega Thread

Post by ciscovp »

Familyman2012 wrote: Thu Jun 11, 2020 8:37 am silly question:

If let say you receive a lender credit of $2,500. and closing cost was $2,000. And No Escrow.

Does that mean the lender will send us a check for $500?

thanks

EDIT: nevermind found my answer. Unable to delete post.
So what is the answer? Do you get a check?
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bostondan
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Location: Boston, MA

Re: Refinance Mega Thread

Post by bostondan »

Just locked a 30-year fixed with UWM for 2.99% with $4000 credit on $350k loan. I'm using the same broker I have used on my prior purchases and refinances who always seems to get me a way better deal than any other place I compare. He also offered 2.75% with no credit, or 2.85% with $2000 credit. It was something like 10-year+ to make our money back compared to the $4000 credit, and that also makes it a <$0 cost to refinance so that's why I took the 2.99% rate.

He had us get the refinance nearly fully approved with UWM prior to doing a rate lock. We managed to time is such that the rate lock came at a good time with low rates.

We are going from 3.5% to the current rate of 2.99%.
“There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” - Elie Wiesel
Familyman2012
Posts: 121
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Re: Refinance Mega Thread

Post by Familyman2012 »

ciscovp wrote: Thu Jun 11, 2020 9:33 am
Familyman2012 wrote: Thu Jun 11, 2020 8:37 am silly question:

If let say you receive a lender credit of $2,500. and closing cost was $2,000. And No Escrow.

Does that mean the lender will send us a check for $500?

thanks

EDIT: nevermind found my answer. Unable to delete post.
So what is the answer? Do you get a check?
This was from a different thread. Take it for what it is. I also emailed my potential lender (waiting for response).



"If some of the lender credit is left over after being used to pay closing costs, it can be used to fund the escrow account. If you are not doing an escrow account, up to $2000 or 2% of the loan amount, whichever is less, can be given as cash back to the borrower at closing. If lender credits are still left over, up to $2500 or 2%, whichever is less, can be used to reduce the loan amount at closing. Lender credits can also be used to pay property tax due within 60 days if you are not doing an escrow account."
Buddy0329
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Re: Refinance Mega Thread

Post by Buddy0329 »

Locked with Northpointe Bank yesterday:
  • Loan amount: $220K+
  • Term: 10 year FRM
  • Rate: 2.375%
  • Bank fee: $650
  • Points: 1/16th
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