Refinance Mega Thread

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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

skierincolorado wrote: Mon Sep 14, 2020 11:43 pm Even a 150k loan has a 57 month breakeven, not nearly 9 years. EDIT: I see your loan amount is 150k, so the breakeven is 57 months. I'd be doing the same as you and taking the cash.

Just guessing at your loan amount, but unless your loan is under 100k, the breakeven isn't 9 years.
:oops: Whoops. Two errors I made. I meant to type in 6 years, typo. And my amortization schedules were wrong. One had a different loan amount on it. So yeah, 5 years. That’s still plenty.
presto987 wrote: Mon Sep 14, 2020 11:50 pm
BrandonBogle wrote: Mon Sep 14, 2020 10:51 pm This is what I did. In May I went from 2.875% 5/5 ARM to 2.625% 15-year at no cost. Then in July I went to a 3+% 15-year with $6,200 profit to me. Now I’m going down to 2.75% with $3,650 profit.
That is amazing. Did you encounter any issues with the Net Tangible Benefit (NTB) test when you went from 2.625% to 3+%? Was it a rate-and-term refi?
Yup, rate-and-term refi. Ironically, no NTB issue, but on this refi I got asked to provide a NTB response. Wasn’t hard when I replied that my benefits is lowering interest by over 1%.
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
jimmyrules712
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Re: Refinance Mega Thread

Post by jimmyrules712 »

atx1202 wrote: Tue Sep 15, 2020 7:55 am Hello, I have LEs from LD and LC for a similar closing cost on 30yr fixed, 2.5%, $500 closing costs.

Which one would you all suggest that I lock with among LD/LC? Is one of them better over the other in terms of processing pipeline, time to close or responsiveness?

Would appreciate if folks who have closed with LC/LD can share their thoughts on closing duration and overall experience. Thank you!
All factors (costs/rate) being equal I would pick LD over LC. I'm in the middle of refinancing with LC and they are abysmally slow and have very poor communication. The only reason I'm sticking with them is I haven't gotten a comparable offer from anyone else and am not in a rush.
mega317
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Re: Refinance Mega Thread

Post by mega317 »

Familyman2012 wrote: Tue Sep 15, 2020 9:27 am What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
Do you want to borrow 600 dollars at 2.whatever percent? What would you do with the 600 in your pocket?
https://www.bogleheads.org/forum/viewtopic.php?t=6212
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

mega317 wrote: Tue Sep 15, 2020 9:37 am
Familyman2012 wrote: Tue Sep 15, 2020 9:27 am What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
Do you want to borrow 600 dollars at 2.whatever percent? What would you do with the 600 in your pocket?
I have a 2.5
Honestly, nothing. I don’t really need it. Just keep it for a rainy day.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Familyman2012 wrote: Tue Sep 15, 2020 9:41 am
mega317 wrote: Tue Sep 15, 2020 9:37 am
Familyman2012 wrote: Tue Sep 15, 2020 9:27 am What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
Do you want to borrow 600 dollars at 2.whatever percent? What would you do with the 600 in your pocket?
I have a 2.5
Honestly, nothing. I don’t really need it. Just keep it for a rainy day.
Also consider if that would make a difference in your lender credits/costs. At $600, that is unlikely, but you never know. In my second refi, financing the escrow costs increased my lender credits by $200. I could then pay those back after closing (like at my first payment).
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

BrandonBogle wrote: Tue Sep 15, 2020 9:57 am
Familyman2012 wrote: Tue Sep 15, 2020 9:41 am
mega317 wrote: Tue Sep 15, 2020 9:37 am
Familyman2012 wrote: Tue Sep 15, 2020 9:27 am What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
Do you want to borrow 600 dollars at 2.whatever percent? What would you do with the 600 in your pocket?
I have a 2.5
Honestly, nothing. I don’t really need it. Just keep it for a rainy day.
Also consider if that would make a difference in your lender credits/costs. At $600, that is unlikely, but you never know. In my second refi, financing the escrow costs increased my lender credits by $200. I could then pay those back after closing (like at my first payment).
I was thinking base on a mortgage calculator. My interest after 20 years is only $200 ish more. Monthly increase $4-5 dollars.

I’m not trying to make a big deal about $600. But would still like to know what is the better way.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Familyman2012 wrote: Tue Sep 15, 2020 10:04 am I was thinking base on a mortgage calculator. My interest after 20 years is only $200 ish more. Monthly increase $4-5 dollars.

I’m not trying to make a big deal about $600. But would still like to know what is the better way.
Generally, the recommendation is not to finance closing costs. Even $200ish more is that much more in cost on your refi.

That said, if there are outside reasons such as leveraging this to increase your credits or this helps with cash-flow management, there isn’t anything necessarily wrong with financing the costs. Just realize you are paying more for it.

Consider someone who has high property taxes due before year-end refinancing. Given the timeline, they are likely to have bring the property taxes to the closing table, even if they won’t have an escrow (Fannie Mae guidelines require that if due within 60 days of closing). Let’s say those taxes are $10k annually. While they should have this cash on hand to pay the bill shortly (they didn’t have an escrow previously) or their old escrow account has most/all of this in it already, they may not have the liquidity/cash-flow flexibility to front the $10k at closing. In this case, financing the cost allows the refi to still proceed (to provide long-term savings) at the cost of financing (perhaps only for a month or two) that closing cost.

At $600, I wouldn’t really care about it either way. Perhaps finance it just to not have to worry about getting a check or doing a wire transfer during COVID-19.
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

BrandonBogle wrote: Tue Sep 15, 2020 10:12 am
Familyman2012 wrote: Tue Sep 15, 2020 10:04 am I was thinking base on a mortgage calculator. My interest after 20 years is only $200 ish more. Monthly increase $4-5 dollars.

I’m not trying to make a big deal about $600. But would still like to know what is the better way.
Generally, the recommendation is not to finance closing costs. Even $200ish more is that much more in cost on your refi.

That said, if there are outside reasons such as leveraging this to increase your credits or this helps with cash-flow management, there isn’t anything necessarily wrong with financing the costs. Just realize you are paying more for it.

Consider someone who has high property taxes due before year-end refinancing. Given the timeline, they are likely to have bring the property taxes to the closing table, even if they won’t have an escrow (Fannie Mae guidelines require that if due within 60 days of closing). Let’s say those taxes are $10k annually. While they should have this cash on hand to pay the bill shortly (they didn’t have an escrow previously) or their old escrow account has most/all of this in it already, they may not have the liquidity/cash-flow flexibility to front the $10k at closing. In this case, financing the cost allows the refi to still proceed (to provide long-term savings) at the cost of financing (perhaps only for a month or two) that closing cost.

At $600, I wouldn’t really care about it either way. Perhaps finance it just to not have to worry about getting a check or doing a wire transfer during COVID-19.
Good point.
I might just go ahead and finance it and not worrying about wiring or writing a check. Don’t want any delay. Then if I feel the need. Make a $600 dollar payment to principal.
shockwavesfan
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Re: Refinance Mega Thread

Post by shockwavesfan »

First time poster and need some advice. This thread was very helpful for me as I started my refinance process.

Here are the details:

Currently 6 years in to a 30 year mortgage at 4.25% (Never refinanced). Current LTV is 69%.

Locked a 15 yr fixed at 2.25% on 8/2 with Better.com who matched an offer from Watermark and since I can also get the $2,500 amex credit it was a no brainer. Total fees to close are $1,920 after current lender credits (this doesn't include the appraisal fee). Had to pay appraisal fee when locking although they quickly told me an appraisal wouldn't be necessary and the fee would be refunded before closing (fine with me). Went through underwriting/title report and that finished on 9/9. Then they tell me that due to some items that came up in underwriting, they need an appraisal to be done. I said fine if you waive the appraisal fee which they have agreed to and I also asked for some additional lender credits. Is there anything else I should do here?
jgman
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Re: Refinance Mega Thread

Post by jgman »

Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Xrayman69
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Re: Refinance Mega Thread

Post by Xrayman69 »

jimmyrules712 wrote: Tue Sep 15, 2020 9:30 am
atx1202 wrote: Tue Sep 15, 2020 7:55 am Hello, I have LEs from LD and LC for a similar closing cost on 30yr fixed, 2.5%, $500 closing costs.

Which one would you all suggest that I lock with among LD/LC? Is one of them better over the other in terms of processing pipeline, time to close or responsiveness?

Would appreciate if folks who have closed with LC/LD can share their thoughts on closing duration and overall experience. Thank you!
All factors (costs/rate) being equal I would pick LD over LC. I'm in the middle of refinancing with LC and they are abysmally slow and have very poor communication. The only reason I'm sticking with them is I haven't gotten a comparable offer from anyone else and am not in a rush.
Funny, I am currently with LD and I was going to say consider LC for your same reasons.
presto987
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Re: Refinance Mega Thread

Post by presto987 »

jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
coconutpolito
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Re: Refinance Mega Thread

Post by coconutpolito »

jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
That's an amazing rate! Any costs? Best I could get was 2.5% but I decided to keep my 3.25% with a mortgage credit certificate which effectively brings down my rate to ~2.5 so no point in refinancing.
jgman
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Re: Refinance Mega Thread

Post by jgman »

presto987 wrote: Tue Sep 15, 2020 11:22 am
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
Total costs $2677 Credit of $1475 total closing costs $4816

They beat my 2.5% rate quote from Lender Fi.
atxll
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Re: Refinance Mega Thread

Post by atxll »

I decided to start getting quotes with credit pulls today. First one I tried was Better. I had signed up with the Amex link through them a few months ago but never submitted the application. My understanding was the offer should still be good until December as long as I had initiated before it expired. Unfortunately I'm unable to submit the application because the address on my credit report is different than the address I am trying to refinance. It craps out on the soft credit pull step. Their website has zero ability to work around this issue and when I called the customer service agent had no clue either. They claim they have never had that issue before. I tried to submit an application with my mailing address and that did go through so the only explanation was the address mismatch. The rep tried to claim I couldn't move forward with the correct address because my original application was too old and the Amex offer isn't good anymore. They also couldn't assist with correcting the new application or allowing the app to move past the credit address issue. Guess I will just move on to the next lender.
Calirefi2020
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Re: Refinance Mega Thread

Post by Calirefi2020 »

jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Amazing rate.. what’s your loan amount and LTV?
jgman
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Re: Refinance Mega Thread

Post by jgman »

Calirefi2020 wrote: Tue Sep 15, 2020 2:53 pm
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Amazing rate.. what’s your loan amount and LTV?
loan amount of 475K LTV of 60%. Appraisal waived. Credit score 749
Calirefi2020
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Re: Refinance Mega Thread

Post by Calirefi2020 »

jgman wrote: Tue Sep 15, 2020 2:57 pm
Calirefi2020 wrote: Tue Sep 15, 2020 2:53 pm
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Amazing rate.. what’s your loan amount and LTV?
loan amount of 475K LTV of 60%. Appraisal waived. Credit score 749
Nice.. it makes sense now.. LD does have very competitive rates.. it’s just I’ve 81% LTV, $620k loan and condo .. I’m stuck at 2.625% with them..
atx1202
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Re: Refinance Mega Thread

Post by atx1202 »

jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
How long was it from locking until closing date? I’ve heard a lot of folks say they barely close in 60days (too close to rate lock expiration).
jgman
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Re: Refinance Mega Thread

Post by jgman »

atx1202 wrote: Tue Sep 15, 2020 3:04 pm
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
How long was it from locking until closing date? I’ve heard a lot of folks say they barely close in 60days (too close to rate lock expiration).
Close by end of October or 45 days from lock date which was today. Sent my online application in this morning and received a call from loan officer within an hour. Very impressed.
presto987
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Re: Refinance Mega Thread

Post by presto987 »

jgman wrote: Tue Sep 15, 2020 11:49 am
presto987 wrote: Tue Sep 15, 2020 11:22 am
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
Total costs $2677 Credit of $1475 total closing costs $4816

They beat my 2.5% rate quote from Lender Fi.
I'm not sure I follow the costs. Can you break it out into A, B, C, and lender credit? Is 2677 the origination fee and points under section A?
perceptionist
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Post by perceptionist »

I'm currently in the process with Owning. Applied on 9/1 and will be signing closing docs with the notary tonight. I've read some people mention that Owning will move forward with closing docs before the loan being approved by underwriting. Anyone want to share their experiences with that? Is there anything I should look out for? How long should I expect for it to be 100% complete?
mega317
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Re: Refinance Mega Thread

Post by mega317 »

perceptionist wrote: Tue Sep 15, 2020 3:39 pm I'm currently in the process with Owning. Applied on 9/1 and will be signing closing docs with the notary tonight. I've read some people mention that Owning will move forward with closing docs before the loan being approved by underwriting. Anyone want to share their experiences with that? Is there anything I should look out for? How long should I expect for it to be 100% complete?
Lol yep. I posted last night on this. Applied 8/31, Signed Thursday, last night there was a kind of frantic call from LO because underwriting doesn’t like how my paystubs are reported out. More phone calls today, apparently my wife’s (kind of small) income which we hadn’t included will make the difference? Don’t have final word yet. I wish they would just wait to sign, I don’t understand. Maybe while rates are dropping they want to lock you in?
I think someone else posted last week that underwriting was asking for documents weeks after they signed.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
perceptionist
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Re: Refinance Mega Thread

Post by perceptionist »

mega317 wrote: Tue Sep 15, 2020 3:49 pm
perceptionist wrote: Tue Sep 15, 2020 3:39 pm I'm currently in the process with Owning. Applied on 9/1 and will be signing closing docs with the notary tonight. I've read some people mention that Owning will move forward with closing docs before the loan being approved by underwriting. Anyone want to share their experiences with that? Is there anything I should look out for? How long should I expect for it to be 100% complete?
Lol yep. I posted last night on this. Applied 8/31, Signed Thursday, last night there was a kind of frantic call from LO because underwriting doesn’t like how my paystubs are reported out. More phone calls today, apparently my wife’s (kind of small) income which we hadn’t included will make the difference? Don’t have final word yet. I wish they would just wait to sign, I don’t understand. Maybe while rates are dropping they want to lock you in?
I think someone else posted last week that underwriting was asking for documents weeks after they signed.
Wow weeks after signing? I've never went through anything like this before and I've probably done about 4 refi's before this. As long as they communicate well and not mess up anything I don't mind, but it's such a odd way to complete the process. I will post an update when everything is finalized and the loan is disbursed.
jgman
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Re: Refinance Mega Thread

Post by jgman »

presto987 wrote: Tue Sep 15, 2020 3:33 pm
jgman wrote: Tue Sep 15, 2020 11:49 am
presto987 wrote: Tue Sep 15, 2020 11:22 am
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
Total costs $2677 Credit of $1475 total closing costs $4816

They beat my 2.5% rate quote from Lender Fi.
I'm not sure I follow the costs. Can you break it out into A, B, C, and lender credit? Is 2677 the origination fee and points under section A?
A+B+C= $2677. Lender credit is a separate item and is $1475
presto987
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Re: Refinance Mega Thread

Post by presto987 »

jgman wrote: Tue Sep 15, 2020 4:03 pm
presto987 wrote: Tue Sep 15, 2020 3:33 pm
jgman wrote: Tue Sep 15, 2020 11:49 am
presto987 wrote: Tue Sep 15, 2020 11:22 am
jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
Total costs $2677 Credit of $1475 total closing costs $4816

They beat my 2.5% rate quote from Lender Fi.
I'm not sure I follow the costs. Can you break it out into A, B, C, and lender credit? Is 2677 the origination fee and points under section A?
A+B+C= $2677. Lender credit is a separate item and is $1475
Well done! You are probably set for the next 30 years :)
jgman
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Re: Refinance Mega Thread

Post by jgman »

presto987 wrote: Tue Sep 15, 2020 4:09 pm
jgman wrote: Tue Sep 15, 2020 4:03 pm
presto987 wrote: Tue Sep 15, 2020 3:33 pm
jgman wrote: Tue Sep 15, 2020 11:49 am
presto987 wrote: Tue Sep 15, 2020 11:22 am

Congrats, phenomenal rate. What were your costs? Did you have them price match another lender?
Total costs $2677 Credit of $1475 total closing costs $4816

They beat my 2.5% rate quote from Lender Fi.
I'm not sure I follow the costs. Can you break it out into A, B, C, and lender credit? Is 2677 the origination fee and points under section A?
A+B+C= $2677. Lender credit is a separate item and is $1475
Well done! You are probably set for the next 30 years :)
Im actually retiring next year. Hope I can make it another 30 years :D
presto987
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Re: Refinance Mega Thread

Post by presto987 »

jgman wrote: Tue Sep 15, 2020 4:13 pm
presto987 wrote: Tue Sep 15, 2020 4:09 pm
jgman wrote: Tue Sep 15, 2020 4:03 pm
A+B+C= $2677. Lender credit is a separate item and is $1475
Well done! You are probably set for the next 30 years :)
Im actually retiring next year. Hope I can make it another 30 years :D
Lol! Sent you a PM regarding LoanDepot.
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

This was posted the other day:
But just a reminder if anyone is on the fence with Better.com. This was on the front page on the website.

“As you may know, the Federal Housing Finance Agency (FHFA) is introducing a 0.5% fee on refinance loans. That means you must lock your rate with Better Mortgage by September 20, 2020, to avoid paying additional costs. Rates are near historic lows, so if you're thinking of refinancing your home, start your pre-approval and find out exactly how much you could save.”
jbuzolich
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Re: Refinance Mega Thread

Post by jbuzolich »

Familyman2012 wrote: Tue Sep 15, 2020 4:20 pm This was posted the other day:
But just a reminder if anyone is on the fence with Better.com. This was on the front page on the website.

“As you may know, the Federal Housing Finance Agency (FHFA) is introducing a 0.5% fee on refinance loans. That means you must lock your rate with Better Mortgage by September 20, 2020, to avoid paying additional costs. Rates are near historic lows, so if you're thinking of refinancing your home, start your pre-approval and find out exactly how much you could save.”
I saw that on their website as well but multiple news articles I've read said it does not take effect now until December. I'm hoping the Better website is just out of date.
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BrandonBogle
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Post by BrandonBogle »

jbuzolich wrote: Tue Sep 15, 2020 4:34 pm
Familyman2012 wrote: Tue Sep 15, 2020 4:20 pm This was posted the other day:
But just a reminder if anyone is on the fence with Better.com. This was on the front page on the website.

“As you may know, the Federal Housing Finance Agency (FHFA) is introducing a 0.5% fee on refinance loans. That means you must lock your rate with Better Mortgage by September 20, 2020, to avoid paying additional costs. Rates are near historic lows, so if you're thinking of refinancing your home, start your pre-approval and find out exactly how much you could save.”
I saw that on their website as well but multiple news articles I've read said it does not take effect now until December. I'm hoping the Better website is just out of date.
That date would be correct for the fee going into effect on 12/1. Remember, this is NOT a fee charged to you, but a fee charged to the lender when they deliver the loan to Fannie/Freddie. So if you apply in late Sept, get a 45 day lock to around mid-Nov, then it takes two weeks to get the loan to Fannie/Freddie, they are just squeaking in before the deadline. Hence why they are basically saying pricing will become sour (a bit) on 9/20 to account for their extra cost.
presto987
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Post by presto987 »

jbuzolich wrote: Tue Sep 15, 2020 4:34 pm
Familyman2012 wrote: Tue Sep 15, 2020 4:20 pm This was posted the other day:
But just a reminder if anyone is on the fence with Better.com. This was on the front page on the website.

“As you may know, the Federal Housing Finance Agency (FHFA) is introducing a 0.5% fee on refinance loans. That means you must lock your rate with Better Mortgage by September 20, 2020, to avoid paying additional costs. Rates are near historic lows, so if you're thinking of refinancing your home, start your pre-approval and find out exactly how much you could save.”
I saw that on their website as well but multiple news articles I've read said it does not take effect now until December. I'm hoping the Better website is just out of date.
December 1 is when Fannie/Freddie start charging the fee on loans that are sold to them. It seems that lenders usually sell the loans around 2-3 weeks after they fund.

If you lock a rate now, take 60 days to close, and take 3 more days to fund after closing, that leaves a week (accounting for the Thanksgiving holiday) for lenders to sell the loan to Fannie/Freddie. That is probably not enough time. So my hunch is that lenders who are taking 60 days to close like Loan Cabin have already incorporated the 0.5% fee in their pricing. Lenders who take 45 days to close should be incorporating it imminently.

EDIT: Looks like BrandonBogle beat me to the punch as usual, but I'll leave this here anyway.

EDIT 2: When I look at Loan Cabin's pricing on their website compared to the rate schedule I locked last week, there is indeed a roughly 0.5% difference in the points/credit.
zhuyz05
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Re: Refinance Mega Thread

Post by zhuyz05 »

FrugalProfessor wrote: Mon Sep 14, 2020 5:54 pm
FrugalProfessor wrote: Fri Sep 11, 2020 6:48 pm Just locked in 2.25%, 15Y, $0 lender fee refi with LenderFI on a $244k mortgage. It was an unbelievably slick process that took less than an hour.

After I got my online quotes, I called to ask about waiving appraisal + escrow. They waived both and took $1k or so off of the closing costs that were generated with my online application.
I ended up getting a 15Y 2.25Y $253k Loan Estimate from Better.com with approximately net zero in closing fees. The way to optimally sequence the negotiation appears to be:
1.) collect estimates from company A
2.) provide estimate from company A to company B and have company B beat it by $100 in closing costs
3-(N-1).) repeat step 2 as many times as you want to bother with
N.) bring best loan to Better.com, who will beat it by $100 while including a $550 appraisal fee in the estimate. With a low enough LTV (mine was about 50%), they'll waive the $550 fee, meaning you'll beat the next-best offer by $650 in closing fees.

This was my first refi experience. It reminded me a lot buying a new car.

I'm now out of the woods yet, but it appears to be the easiest $10k (in interest savings) I've made in my life....

For the curious, I created a spreadsheet that goes through the refi math (breakeven, interest savings, etc) that can be accessed through this blog post: https://frugalprofessor.com/mortgage-re ... fi-review/
Thanks for sharing your strategy! I am curious -- when can one walk away even if they have signed the disclosure forms?
perceptionist
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Re: Refinance Mega Thread

Post by perceptionist »

Familyman2012 wrote: Tue Sep 15, 2020 9:27 am What would you do:

Would you roll in payoff amount into new loan? Or bring cash to close?
It’s about a $600 difference.

I’m thinking I rather Just roll it in and keep the $600 In my pocket because $600 only raises my monthly payment by only $4-5 dollars.

Am I thinking it correctly?
I had that option as well and I just told them I'll pay for it. That's just me though. The difference either way is not significant anyways, especially in your case. Mines was 4x that amount.
jbuzolich
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Re: Refinance Mega Thread

Post by jbuzolich »

presto987 wrote: Tue Sep 15, 2020 4:42 pm
jbuzolich wrote: Tue Sep 15, 2020 4:34 pm
Familyman2012 wrote: Tue Sep 15, 2020 4:20 pm This was posted the other day:
But just a reminder if anyone is on the fence with Better.com. This was on the front page on the website.

“As you may know, the Federal Housing Finance Agency (FHFA) is introducing a 0.5% fee on refinance loans. That means you must lock your rate with Better Mortgage by September 20, 2020, to avoid paying additional costs. Rates are near historic lows, so if you're thinking of refinancing your home, start your pre-approval and find out exactly how much you could save.”
I saw that on their website as well but multiple news articles I've read said it does not take effect now until December. I'm hoping the Better website is just out of date.
December 1 is when Fannie/Freddie start charging the fee on loans that are sold to them. It seems that lenders usually sell the loans around 2-3 weeks after they fund.

If you lock a rate now, take 60 days to close, and take 3 more days to fund after closing, that leaves a week (accounting for the Thanksgiving holiday) for lenders to sell the loan to Fannie/Freddie. That is probably not enough time. So my hunch is that lenders who are taking 60 days to close like Loan Cabin have already incorporated the 0.5% fee in their pricing. Lenders who take 45 days to close should be incorporating it imminently.

EDIT: Looks like BrandonBogle beat me to the punch as usual, but I'll leave this here anyway.

EDIT 2: When I look at Loan Cabin's pricing on their website compared to the rate schedule I locked last week, there is indeed a roughly 0.5% difference in the points/credit.
Hope I didn't miss the party. I had one quote with Better so far but the fees were too high. Guess I better get cracking the rest of this week and apply everywhere that looks interesting.
chem
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Re: Refinance Mega Thread

Post by chem »

If you are NOT using escrow (for taxes/insurance), is there a limit on the amount of closing costs that can be rolled into a loan for a refi?

Some type of regulation or common lender policy on that?

Better.com is trying to tell me there's a $1000 limit. Not sure if there's just a miscommunication.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

chem wrote: Tue Sep 15, 2020 5:37 pm If you are NOT using escrow (for taxes/insurance), is there a limit on the amount of closing costs that can be rolled into a loan for a refi?

Some type of regulation or common lender policy on that?

Better.com is trying to tell me there's a $1000 limit. Not sure if there's just a miscommunication.
There is no limit on how much of the closing costs can be rolled in to be considered a rate-and-term refi vs. a cash-put refi. However, there are boundaries were pricing changes (often because Fannie Mae charged different fees based on LTV) and a boundary based on your debt-to-income.

So there could very well be a $1k limit in your case or you would have too much DTI or LTV and pricing would change.
GRAZ
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Re: Refinance Mega Thread

Post by GRAZ »

I just wanted ot update on here that my $2500 AMEX statement credit was applied today for my refinance with better.com. I closed my refinance in early July and was surprised that it took so long for the credit to post, but it finally showed up today.
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anon_investor
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Re: Refinance Mega Thread

Post by anon_investor »

Goal33 wrote: Mon Sep 14, 2020 7:04 pm
Johny wrote: Mon Sep 14, 2020 5:27 pm Has anyone ever been able to negotiate the origination fees under A on an LE before? Maybe even get them waived completely? Thank you.
mine are $0 and i didn't negotiate. LenderFi
+1.
wootwoot
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Re: Refinance Mega Thread

Post by wootwoot »

Locked a 2.5% 30 year no cost with Interactive Mortgage yesterday, 60% LTV.
coconutpolito
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Re: Refinance Mega Thread

Post by coconutpolito »

jgman wrote: Tue Sep 15, 2020 11:01 am Just finalized my refi with Load Depot. Very quick and smooth experience. Highly recommend.

30yr at 2.25%
Sent you a dm. Loan depot contact please. Thanks.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

I just wanted to share folks that I’ve had a good experience with Network Capital.

Their rate is competitive and they were willing to beat a competing offer. The rates on their website above may include origination fees, I don’t know. In my case, I have 2.75% on $150k with $1,100 in A + B + C + E, escrow waived, and $1,500 in lender credits.

They are more along the lines of the online lenders that much prefer to talk to you on the phone vs. communicating over email or right on their website, but they haven’t been pushy or anything. I may have just lucked out with a loan officer that wasn’t pushy.

Worth a shot if folks are shopping around, especially if you have a competing offer you can send them. But again, they were competitive even before a competing offer. They do a 60-day rate lock and estimate 30-45 days for closing at the moment.
akuseimark
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Re: Refinance Mega Thread

Post by akuseimark »

BrandonBogle wrote: Tue Sep 15, 2020 9:34 pm I just wanted to share folks that I’ve had a good experience with Network Capital.

Their rate is competitive and they were willing to beat a competing offer. The rates on their website above may include origination fees, I don’t know. In my case, I have 2.75% on $150k with $1,100 in A + B + C + E, escrow waived, and $1,500 in lender credits.

They are more along the lines of the online lenders that much prefer to talk to you on the phone vs. communicating over email or right on their website, but they haven’t been pushy or anything. I may have just lucked out with a loan officer that wasn’t pushy.

Worth a shot if folks are shopping around, especially if you have a competing offer you can send them. But again, they were competitive even before a competing offer. They do a 60-day rate lock and estimate 30-45 days for closing at the moment.
It looks like their website will show you your home value that lenders use. Mine came very close to the value LenderFi and Guaranteed Rate used and was much different (higher) than expected.
RealOrdinaryName
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Re: Refinance Mega Thread

Post by RealOrdinaryName »

Just locked in 2.25 with roughly 1200 (pretty much just title) in closing costs. Hoping to close sooner rather than later, but we'll see.
I ended up going with QL but LD offered a very similar loan estimate.
fuzzball
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Re: Refinance Mega Thread

Post by fuzzball »

Locked in 2.375%, Points paid 0.78, 30 yrs with LoanDepot.
Refi 727k
Cash to close for me is 25k (~15k in transfer taxes.. NYS)
Escrow is waived.
My P&I goes down by 804/month and my breakeven is 32-33 months.
*LD does not process CEMA applications... so I have to pay the transfer/recording taxes again.

I do have a few Q's:
Are the points and transfer taxes on a refi deductible on taxes? I will be itemizing again for this year.

When does it make sense to roll in the closing cost?

Right now, I pay 4500/month (PITI). My new PI is 2825 (escrow waived). If I can swing it, should I keep making the 4500/month payment (with any excess going to principle? Or is there a better way to pay this off?

Thanks!
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

fuzzball wrote: Tue Sep 15, 2020 10:14 pm Locked in 2.375%, Points paid 0.78, 30 yrs with LoanDepot.
Refi 727k
Cash to close for me is 25k (~15k in transfer taxes.. NYS)
Escrow is waived.
My P&I goes down by 804/month and my breakeven is 32-33 months.
*LD does not process CEMA applications... so I have to pay the transfer/recording taxes again.

I do have a few Q's:
Are the points and transfer taxes on a refi deductible on taxes? I will be itemizing again for this year.

When does it make sense to roll in the closing cost?

Right now, I pay 4500/month (PITI). My new PI is 2825 (escrow waived). If I can swing it, should I keep making the 4500/month payment (with any excess going to principle? Or is there a better way to pay this off?
In your scenario, it would really depend on cash-flow and those darn transfer taxes. If you roll in the closing costs, you will raise the loan amount about $25k and pay more transfer tax on the higher loan amount.

But given the plan to continue paying $4,500/mo, I think you are fine if you want to roll in the costs as you’ll be paying that portion down very quickly.

Out of curiosity, did you ask them what your par (0 point) rate is? That 0.78 point is $5,670 by itself. Likely it is worth it, but it doesn’t hurt to ask.

On the point of income taxes, points I believe can be deducted over the life of the loan. I think there are provisions to deducted in the year the loan originates, but that may be limited to purchase loans vs. refis. Others will hopefully chime in with more info.

Btw for others, given that fuzzball is stuck with the transfer tax bill and most lenders that are competitive just won’t do a CEMA right now (the loan will assuredly not be sold to Fannie/Freddie by 12/1 with a CEMA), this is one of those cases were it will make sense to pay reasonable points. The idea is that you put yourself in your forever rate now, as refinancing again will be cost-prohibitive without a CEMA, and those who will do one likely won’t give you 2.5% or so on a 30-year at little A + B + C cost.
InvestDoc
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Re: Refinance Mega Thread

Post by InvestDoc »

perceptionist wrote: Tue Sep 15, 2020 3:55 pm
mega317 wrote: Tue Sep 15, 2020 3:49 pm
perceptionist wrote: Tue Sep 15, 2020 3:39 pm I'm currently in the process with Owning. Applied on 9/1 and will be signing closing docs with the notary tonight. I've read some people mention that Owning will move forward with closing docs before the loan being approved by underwriting. Anyone want to share their experiences with that? Is there anything I should look out for? How long should I expect for it to be 100% complete?
Lol yep. I posted last night on this. Applied 8/31, Signed Thursday, last night there was a kind of frantic call from LO because underwriting doesn’t like how my paystubs are reported out. More phone calls today, apparently my wife’s (kind of small) income which we hadn’t included will make the difference? Don’t have final word yet. I wish they would just wait to sign, I don’t understand. Maybe while rates are dropping they want to lock you in?
I think someone else posted last week that underwriting was asking for documents weeks after they signed.
Wow weeks after signing? I've never went through anything like this before and I've probably done about 4 refi's before this. As long as they communicate well and not mess up anything I don't mind, but it's such a odd way to complete the process. I will post an update when everything is finalized and the loan is disbursed.
Owning took 2 weeks after I signed before they disbursed. Now I wonder if I was still in underwriting during that time. My loan team disappeared and never communicated with me after I signed so it was really difficult to get updates about what was going on and when the loan would fund. I wonder if they do this so they can claim they close on loans in 2-3 weeks to draw more people in. Very frustrating process considering you only have 3 days to withdraw after signing the papers. I had to give the notary a check but someone else here reported not giving any money until the disbursement date was finalized so that the prepaids could be accurately calculated. If you have this option I highly recommend this because they made mistakes in my prepaids and it took a few weeks and multiple calls and emails to get a refund for the additional refund they owed me.
spitaxe
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Re: Refinance Mega Thread

Post by spitaxe »

skierincolorado wrote: Mon Sep 14, 2020 11:29 pm
dudefella wrote: Mon Sep 14, 2020 9:39 pm Loan: 315k
Current rate: 3.125%

Loan A: 2.25%
A+B+C: $1900
Lender credit:$1200

Loan B: 2.375%
A+B+C: $1900
Lender credit:$2400

Taking the lower date would reduce mortgage by $20ish a month. Recouping the $1200 would take about 5 years so my assumption is go 2.375% and get the $2400 instead so everything is covered?
You're nor factoring the change in interest. Yes your payment is only $20 less, but more of it goes to principal. What you should care about is the reduction in interest, which is $39.38/month for 1/8 of a % on a 315k loan. At close to $40/month in savings, you will break even in 2.5 years.

It's still a toss up IMO but I'd be leaning towards the lower rate when the breakeven is less than 3 years.

Use this calculator but be sure to set the tax rate to 0% unless you itemize: https://www.bankrate.com/calculators/mo ... lator.aspx

What an awesome refi thread! I'm still confused though :(. We're those people that nearly double our monthly mortgage payment with the goal of paying the house off ASAP. We understand the opportunity cost, but the satisfaction of not having a mortgage is so enticing (we also save a significant portion of our income, so we're not cash poor). Anyway, we are comparing refinance opportunities and I'm still not entirely clear on how to calculate the closing cost break-even date. I thought I understood, then I read this article (https://www.lendingtree.com/home/mortga ... refinance/) that seems to indicate the calculation is:

TOTAL CLOSING COST/(MONTHLY PAYMENT SAVINGS + AVERAGE MONTHLY INTEREST SAVINGS). With that logic, it seems the average monthly increase in equity as a result of the lower refinance rate should also be included in the denominator. :confused>

I feel like the above formula is double dipping on savings somehow. Or maybe I'm completely misunderstanding. Anyway, here's our situation:

Original loan: $139,650
Current balance: $88,000
Current rate: 4.625%
Current term: 30 years
Refi rate: 2.5%
Refi term: 15 years
Refi cash out: $0
Refi closing costs: $3,042
Monthly payment: $1740 (includes minimum + extra; will not change regardless of refi decision)

If we don't refinance, we're going to put the closing costs toward our current principal. Therefore, my amortization spreadsheet indicates:

Reduction in minimum monthly payment: $131.23
Average monthly interest savings until payoff date (assuming an October start date): $81.64

Other benefits of this refi are minimal, but positive, including knocking a couple months off the payoff date and a net savings after closing costs of about $1000 through the payoff date. But most importantly, in the event of a job loss (possible) that necessitates moving to the minimum payment, our interest savings over the full life of the loan would be in the $17,000 range.

I'm ball parking a bit, but assuming all of this is close, how many months will it be until we break even on the closing costs?

A) $3,042/$131.23 = 23 months
B) $3,042/$81.64 = 37 months
C) $3,042/($131.23+81.64) = 14 months
D) No idea because your math is so bad


Thanks for your insight! Hopefully someone smart can help me wrap my head around this.
ShowMeTheER
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Re: Refinance Mega Thread

Post by ShowMeTheER »

spitaxe wrote: Wed Sep 16, 2020 1:56 am
skierincolorado wrote: Mon Sep 14, 2020 11:29 pm
dudefella wrote: Mon Sep 14, 2020 9:39 pm Loan: 315k
Current rate: 3.125%

Loan A: 2.25%
A+B+C: $1900
Lender credit:$1200

Loan B: 2.375%
A+B+C: $1900
Lender credit:$2400

Taking the lower date would reduce mortgage by $20ish a month. Recouping the $1200 would take about 5 years so my assumption is go 2.375% and get the $2400 instead so everything is covered?
You're nor factoring the change in interest. Yes your payment is only $20 less, but more of it goes to principal. What you should care about is the reduction in interest, which is $39.38/month for 1/8 of a % on a 315k loan. At close to $40/month in savings, you will break even in 2.5 years.

It's still a toss up IMO but I'd be leaning towards the lower rate when the breakeven is less than 3 years.

Use this calculator but be sure to set the tax rate to 0% unless you itemize: https://www.bankrate.com/calculators/mo ... lator.aspx

What an awesome refi thread! I'm still confused though :(. We're those people that nearly double our monthly mortgage payment with the goal of paying the house off ASAP. We understand the opportunity cost, but the satisfaction of not having a mortgage is so enticing (we also save a significant portion of our income, so we're not cash poor). Anyway, we are comparing refinance opportunities and I'm still not entirely clear on how to calculate the closing cost break-even date. I thought I understood, then I read this article (https://www.lendingtree.com/home/mortga ... refinance/) that seems to indicate the calculation is:

TOTAL CLOSING COST/(MONTHLY PAYMENT SAVINGS + AVERAGE MONTHLY INTEREST SAVINGS). With that logic, it seems the average monthly increase in equity as a result of the lower refinance rate should also be included in the denominator. :confused>

I feel like the above formula is double dipping on savings somehow. Or maybe I'm completely misunderstanding. Anyway, here's our situation:

Original loan: $139,650
Current balance: $88,000
Current rate: 4.625%
Current term: 30 years
Refi rate: 2.5%
Refi term: 15 years
Refi cash out: $0
Refi closing costs: $3,042
Monthly payment: $1740 (includes minimum + extra; will not change regardless of refi decision)

If we don't refinance, we're going to put the closing costs toward our current principal. Therefore, my amortization spreadsheet indicates:

Reduction in minimum monthly payment: $131.23
Average monthly interest savings until payoff date (assuming an October start date): $81.64

Other benefits of this refi are minimal, but positive, including knocking a couple months off the payoff date and a net savings after closing costs of about $1000 through the payoff date. But most importantly, in the event of a job loss (possible) that necessitates moving to the minimum payment, our interest savings over the full life of the loan would be in the $17,000 range.

I'm ball parking a bit, but assuming all of this is close, how many months will it be until we break even on the closing costs?

A) $3,042/$131.23 = 23 months
B) $3,042/$81.64 = 37 months
C) $3,042/($131.23+81.64) = 14 months
D) No idea because your math is so bad


Thanks for your insight! Hopefully someone smart can help me wrap my head around this.
Just focus on the interest savings. It’s a good assumption to keep the same payment you are making today, and thus the shift is cutting interest (since that now flows to principal).

So simple, rounded math is that you’ll save 2% in interest each year on the refi. As compared to your current mortgage that means about $1,700 - $1,800 per year in the short-term. Your payback is in the 20 month range.

If you are on an extreme paydown schedule currently (maybe you are planning to pay it off in 4 years, for example), then the $1,700 - $1,800 estimate is high and your break even is longer and the refi may not be worthwhile.
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