Refinance Mega Thread

[VTECHUMP]

Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?

Why is E so high? This loan is costing you $3715 to get to 2.5%. I think you can do better.

E:
Recording Fees and Other Taxes: $97
Transfer Taxes: $850

I was thinking the same thing about doing better, but that 2.5% fixed rate is appealing. I'll attempt some negotiating with them tomorrow.

Thanks for the feedback.

After a lot of back and forth, here is where they ended up.

2.5%, $3200 in costs
2.625%, $2175 in costs
2.875%, $275 in costs

They wouldn't quote 2.75%. Reading through this thread it sounds like the consensus would be to take the 2.875% and refi again if rates drop?

[itsallaboutme]

I am seeing this new fee topic pop up. I haven't really read up on it but I am closing on the 25th will this affect me? They said I will not have to make a payment until Oct. Where would I look for this fee? I haven't asked my lender yet but I will later today.

[BrandonBogle]

I am seeing this new fee topic pop up. I haven't really read up on it but I am closing on the 25th will this affect me? They said I will not have to make a payment until Oct. Where would I look for this fee? I haven't asked my lender yet but I will later today.

viewtopic.php?p=5447547#p5447547

[itsallaboutme]

I am seeing this new fee topic pop up. I haven't really read up on it but I am closing on the 25th will this affect me? They said I will not have to make a payment until Oct. Where would I look for this fee? I haven't asked my lender yet but I will later today.

viewtopic.php?p=5447547#p5447547

Thanks

[m7a8a6]

Ah!! Good point!

This is probably a better move. I will follow-up with them and see what they can do there. If they do offer enough lender credits to cover the costs, is it a good general practice to lock this in at this point and proceed with the application?

Some lenders are willing to give you rates verbally before you go thru an application or look at their rates on websites. My feeling is if they are too far off verbally on online, don’t waste time on another application and giving too much personal info to various lenders.
Have your considered 2.75% with lender credit for closing? Or move to 20-yr or 15-yr?

So I'm finally getting somewhere (thank you all so far for all the wisdom here).

Just got my first decent offer (in the right direction) from LenderFi...

Current Loan: 249K 30yr fixed at 4.5%

Loan Amount: 249K
LTV: 63%
Term: 30yr fixed at 2.625%

A: $354
B: $217 (appraisal waived)
C: $1175
D: $315
Total (A+B+C+D): $2061

Questions I have is how do I approach the other lenders with this LE? Should I just forward it over to them and ask them if they will beat it? Or should i apply for the same % officially and then share the LE with them for better rates?

[JSDNJ]

Do you all believe that rates will drop below mid 2's in the medium term? Right now I have a 2.5% on a 30 locked with about ~$1.2k back after closing costs. I could do a 2.375% (assuming a half a point) and be out about $750 in closing costs. Monthly payments would be reduced $25 a month which is about 2.5 years to break even. Will stay at this home a minimum of 8 more years (kid off to college) and it's built to be a retirement home if we do decide to stay.

The main question about rate drops is if I would refinance in the next year or so. Have been playing the refinance game (4 in the last 2 years) each time getting credits and a lower rate, but wondering if we have hit the floor. Mortgage news daily has some informative pieces about how the spread right now is still historically high.

Can you post your ABCE and lender credits?

You’re telling us you’re getting 2.5 for better than no cost? I’ve not heard of that before. Who’s the lender?

[JSDNJ]

Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?

Why is E so high? This loan is costing you $3715 to get to 2.5%. I think you can do better.

E:
Recording Fees and Other Taxes: $97
Transfer Taxes: $850

I was thinking the same thing about doing better, but that 2.5% fixed rate is appealing. I'll attempt some negotiating with them tomorrow.

Thanks for the feedback.

After a lot of back and forth, here is where they ended up.

2.5%, $3200 in costs
2.625%, $2175 in costs
2.875%, $275 in costs

They wouldn't quote 2.75%. Reading through this thread it sounds like the consensus would be to take the 2.875% and refi again if rates drop?

That’s personal preference really. I’m surprised they wouldn’t even get you to no cost at 2.875. Have you tried other lenders?

[BrandonBogle]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

[anon_investor]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Are you eligible for a Better match and the $2.5k amex credits on any of these?

[truenyer]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Are you eligible for a Better match and the $2.5k amex credits on any of these?

And what lender BrandonBogle?

[investor2018]

What do you think about it?

Our current mortgage balance is about $600K and have 2.9% interest rate of 5/5 ARM from PenFed. ARM is due for renewal Q1 next year. We do not have escrow hence pay city tax and HOI directly.

We locked in refinance rate for $510K loan with 2.65% with lender credits covering all closing costs (will have $100 in pocket). This will require us to pay about $80K at the closing to reduce the loan amount to $510K. The new mortgage monthly payment would be about $600 lesser than our current monthly payment. This means we would have about $7K annually to invest somewhere else.

We have a CD that is expiring next month so can use that to pay down the loan amount. Just wondering if this is the right strategy to invest extra cash. We do have enough cash to cover 8-12 months expenses in emergency.

What would you suggest?

[anon_investor]

What do you think about it?

Our current mortgage balance is about $600K and have 2.9% interest rate of 5/5 ARM from PenFed. ARM is due for renewal Q1 next year. We do not have escrow hence pay city tax and HOI directly.

We locked in refinance rate for $510K loan with 2.65% with lender credits covering all closing costs (will have $100 in pocket). This will require us to pay about $80K at the closing to reduce the loan amount to $510K. The new mortgage monthly payment would be about $600 lesser than our current monthly payment. This means we would have about $7K annually to invest somewhere else.

We have a CD that is expiring next month so can use that to pay down the loan amount. Just wondering if this is the right strategy to invest extra cash. We do have enough cash to cover 8-12 months expenses in emergency.

What would you suggest?

Is the entire $80k coming from an expiring CD?

[investor2018]

Yes, CD is above $100K so it will cover all.

[anon_investor]

Yes, CD is above $100K so it will cover all.

That is not a bad move then since rolling that money into another CD will not get you 2.65%, which is what you are basically getting.

[KeepinItPositive]

Currently I have a 2.75/30 locked in with about 1500 coming back to me (lender credits exceed loan costs)

I’ve asked the lender how much it would cost to go down to 2.625/30 or what the closest 15 year is on my rate sheet, but am having trouble getting the answer out of them.

Questions for this group:

1. At what price would you all go ahead and drop down to 2.625?

2. What interest rate would it take for you to go down to the 15 year term? We can do the payments, but I like the flexibility of the 30. We will likely pay the loan off in about 15 years anyhow to free up cash flow for college .

[bgh11]

Most lenders will allow you to lock only after u completed the application. You can ask for a LE before locking though. As long as there is no fee upfront and if the rate is decent, I would lock it and continue to shop around. Take the best LE back to lenderfi and ask them to at least match if not beat it.

Ah!! Good point!

This is probably a better move. I will follow-up with them and see what they can do there. If they do offer enough lender credits to cover the costs, is it a good general practice to lock this in at this point and proceed with the application?

Some lenders are willing to give you rates verbally before you go thru an application or look at their rates on websites. My feeling is if they are too far off verbally on online, don’t waste time on another application and giving too much personal info to various lenders.
Have your considered 2.75% with lender credit for closing? Or move to 20-yr or 15-yr?

So I'm finally getting somewhere (thank you all so far for all the wisdom here).

Just got my first decent offer (in the right direction) from LenderFi...

Current Loan: 249K 30yr fixed at 4.5%

Loan Amount: 249K
LTV: 63%
Term: 30yr fixed at 2.625%

A: $354
B: $217 (appraisal waived)
C: $1175
D: $315
Total (A+B+C+D): $2061

Questions I have is how do I approach the other lenders with this LE? Should I just forward it over to them and ask them if they will beat it? Or should i apply for the same % officially and then share the LE with them for better rates?

[MathMaster]

What do you think about it?

Our current mortgage balance is about $600K and have 2.9% interest rate of 5/5 ARM from PenFed. ARM is due for renewal Q1 next year. We do not have escrow hence pay city tax and HOI directly.

We locked in refinance rate for $510K loan with 2.65% with lender credits covering all closing costs (will have $100 in pocket). This will require us to pay about $80K at the closing to reduce the loan amount to $510K. The new mortgage monthly payment would be about $600 lesser than our current monthly payment. This means we would have about $7K annually to invest somewhere else.

We have a CD that is expiring next month so can use that to pay down the loan amount. Just wondering if this is the right strategy to invest extra cash. We do have enough cash to cover 8-12 months expenses in emergency.

What would you suggest?

What are your available options for refinancing the $600K balance (e.g., term, rates, points) in full? I'm assuming you live in an area with standard conforming loan limits (see link: https://www.fhfa.gov/DataTools/Tools/Pa ... s-Map.aspx). What is the difference between your 2.625% offer and your best jumbo loan offer?

I would think about it in terms of the rate you have to pay for a jumbo refinance. If you leave the $80K in another CD, you pay the jumbo rate on the entire $600K. If you used the $80K to lower the rate by 0.75%, that saves you $3825 in interest on the $510K balance in year one. In this environment, that alone would be good return on your $80K, not considering the jumbo rate interest you'll be saving on that $80K minus whatever after tax rate you would have received for it in a new CD. But this approach is like a high rate "forever CD," as you'll not see that money again for a long time.

[BrandonBogle]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Are you eligible for a Better match and the $2.5k amex credits on any of these?

And what lender BrandonBogle?

This was Better beating AimLoan by $1,000 and still being eligible for the Amex credit. Hence the “in the end” and “after all credits”.

[anon_investor]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Are you eligible for a Better match and the $2.5k amex credits on any of these?

And what lender BrandonBogle?

This was Better beating AimLoan by $1,000 and still being eligible for the Amex credit. Hence the “in the end” and “after all credits”.

What is the breakeven time between:
-the 15yr 2.375% and 2.5%
-the 30yr 2.75% and 2.875%

[BrandonBogle]

What do you think about it?

Our current mortgage balance is about $600K and have 2.9% interest rate of 5/5 ARM from PenFed. ARM is due for renewal Q1 next year. We do not have escrow hence pay city tax and HOI directly.

We locked in refinance rate for $510K loan with 2.65% with lender credits covering all closing costs (will have $100 in pocket). This will require us to pay about $80K at the closing to reduce the loan amount to $510K. The new mortgage monthly payment would be about $600 lesser than our current monthly payment. This means we would have about $7K annually to invest somewhere else.

We have a CD that is expiring next month so can use that to pay down the loan amount. Just wondering if this is the right strategy to invest extra cash. We do have enough cash to cover 8-12 months expenses in emergency.

What would you suggest?

What are your available options for refinancing the $600K balance (e.g., term, rates, points) in full? I'm assuming you live in an area with standard conforming loan limits (see link: https://www.fhfa.gov/DataTools/Tools/Pa ... s-Map.aspx). What is the difference between your 2.625% offer and your best jumbo loan offer?

I would think about it in terms of the rate you have to pay for a jumbo refinance. If you leave the $80K in another CD, you pay the jumbo rate on the entire $600K. If you used the $80K to lower the rate by 0.75%, that saves you $3825 in interest on the $510K balance in year one. In this environment, that alone would be good return on your $80K, not considering the jumbo rate interest you'll be saving on that $80K minus whatever after tax rate you would have received for it in a new CD. But this approach is like a high rate "forever CD," as you'll not see that money again for a long time.

Yes, CD is above $100K so it will cover all.

That is not a bad move then since rolling that money into another CD will not get you 2.65%, which is what you are basically getting.

Beaten to the punch by MathMaster, darn!

Yeah investor2018, are you in a county where the full $600k would still be a superconforming and not a jumbo mortgage?

[joelly]

Mortgage amount below $510,400 for most
https://singlefamily.fanniemae.com/orig ... oan-limits

I just closed on a Lender Fi 30 year fixed 2.75% with $400 closing costs.

Wow congratulations!

We are looking for refinance too. How did you get such low interest rate? Does it depend on loan-to-value ratio? I hope you don’t mind me asking.

Loan is (conforming) 540k on 1.2M house. 815 credit score.

What does conforming means?

Thanks in advance for replying.

Thank you for the explanation.

Our loan balance is currently under $450,000 so I guess it is conforming.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

[BrandonBogle]

What is the breakeven time between:
-the 15yr 2.375% and 2.5%
-the 30yr 2.75% and 2.875%

Using the 2.75% 15-year that I locked as a baseline:
15-year @ 2.375% = 42 months
15-year @ 2.5% = 44 months
30-year @ 2.75% & 2.875% = never, as there is no interest savings. Costs $1,500 extra compared to 15-year of the same rate.

Instead using 2.875% as a 30-year baseline:
2.875% 30-year closing costs = $650 in my pocket
2.75% 30-year vs. 2.875% 30-year breakeven = 64 months

All the above are using an amortization table with $0 paid extra during the entire term. At 3.5 - over 5 years before I'm ahead by the lower rate, 2.75% 15-year or 2.875% 30-year is the sweet spot for the rate options available to me.

Please note, the numbers I have been sharing are actually going to end up cheaper. I am going to finance the closing costs and take out just shy of $2k, so my lender credits should increase as I only have a $150k loan.

[anon_investor]

What is the breakeven time between:
-the 15yr 2.375% and 2.5%
-the 30yr 2.75% and 2.875%

Using the 2.75% 15-year that I locked as a baseline:
15-year @ 2.375% = 42 months
15-year @ 2.5% = 44 months
30-year @ 2.75% & 2.875% = never, as there is no interest savings. Costs $1,500 extra compared to 15-year of the same rate.

Instead using 2.875% as a 30-year baseline:
2.875% 30-year closing costs = $650 in my pocket
2.75% 30-year vs. 2.875% 30-year breakeven = 64 months

All the above are using an amortization table with $0 paid extra during the entire term. At 3.5 - over 5 years before I'm ahead by the lower rate, 2.75% 15-year or 2.875% 30-year is the sweet spot for the rate options available to me.

Please note, the numbers I have been sharing are actually going to end up cheaper. I am going to finance the closing costs and take out just shy of $2k, so my lender credits should increase as I only have a $150k loan.

If you plan no further refis, the 15yr @ 2.375% looks good based on the world of a Fannie/Freddie 0.5% fee.

If you plan to gamble on another refi, then obviously the 30yr @ 2.875% is optimal.

Are you planning another refi ?

[bgh11]

Backdoor link I copied for u from previous post.
Not sure what partner, etc codes really mean in the link
https://app.lenderfi.com/partner/C8AX0T ... lts/FQA6D5
Click “modify” in red to punch in your zip and loan info.
Good luck.

Mortgage amount below $510,400 for most
https://singlefamily.fanniemae.com/orig ... oan-limits

Wow congratulations!

We are looking for refinance too. How did you get such low interest rate? Does it depend on loan-to-value ratio? I hope you don’t mind me asking.

Loan is (conforming) 540k on 1.2M house. 815 credit score.

What does conforming means?

Thanks in advance for replying.

Thank you for the explanation.

Our loan balance is currently under $450,000 so I guess it is conforming.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

[joelly]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

[bgh11]

See link above

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

[anon_investor]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

https://app.lenderfi.com/

[joelly]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

https://app.lenderfi.com/

But I thought they’re not accepting anymore loan applications? Pls advise. Thanks so much!

[Mongoose42]

Our loan was funded on Aug 17th with Better. We locked the rate on July 1st, so it took some time, but they delivered in the end. We could've continued negotiating to catch the bottom at 2.5%, but still lowered our rate from 3.75% to 2.75%:

- 30 yr fixed rate at 2.75%
- $765,600 conventional loan in California
- lender credit to cover all costs, except prepaid interest
- received additional credit for appraisal from AMEX promo (they credited my credit card that I used to pay for the appraisal)
- should receive $2,500 AMEX statement balance in 8-12 weeks

Thanks everyone - I learned a lot from your experiences and advice from this thread.

[anon_investor]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

https://app.lenderfi.com/

But I thought they’re not accepting anymore loan applications? Pls advise. Thanks so much!

Others have posted that they were successful submitting apps through the backdoor link despite LenderFi "not accepting more apps, obviously YMMV.

[stm]

Can you post your ABCE and lender credits?

You’re telling us you’re getting 2.5 for better than no cost? I’ve not heard of that before. Who’s the lender?

It was possible for awhile, I locked the day before the FM 0.5% fee was announced at Loan Cabin, and then matched to Better. Closing is before 9/1 so not like they're getting hit with the fee. Looking at final disclosures, after ABCE of about ~$2200, I'm getting $1800 additional credit using towards escrows. And well, the $2500 back from Amex special after matching to Better.

[joelly]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

https://app.lenderfi.com/

But I thought they’re not accepting anymore loan applications? Pls advise. Thanks so much!

Others have posted that they were successful submitting apps through the backdoor link despite LenderFi "not accepting more apps, obviously YMMV.

Wow thanks so much. Applying now. thank you!

[BrandonBogle]

What is the breakeven time between:
-the 15yr 2.375% and 2.5%
-the 30yr 2.75% and 2.875%

Using the 2.75% 15-year that I locked as a baseline:
15-year @ 2.375% = 42 months
15-year @ 2.5% = 44 months
30-year @ 2.75% & 2.875% = never, as there is no interest savings. Costs $1,500 extra compared to 15-year of the same rate.

Instead using 2.875% as a 30-year baseline:
2.875% 30-year closing costs = $650 in my pocket
2.75% 30-year vs. 2.875% 30-year breakeven = 64 months

All the above are using an amortization table with $0 paid extra during the entire term. At 3.5 - over 5 years before I'm ahead by the lower rate, 2.75% 15-year or 2.875% 30-year is the sweet spot for the rate options available to me.

Please note, the numbers I have been sharing are actually going to end up cheaper. I am going to finance the closing costs and take out just shy of $2k, so my lender credits should increase as I only have a $150k loan.

If you plan no further refis, the 15yr @ 2.375% looks good based on the world of a Fannie/Freddie 0.5% fee.

If you plan to gamble on another refi, then obviously the 30yr @ 2.875% is optimal.

Are you planning another refi ?

Given the current rate environment, I am not planning another refi. However, I still wouldn't do the 2.375%. A 3.5 year payback vs. the 2.75% is not worth it to me. Over 15 years, we are only talking a $4,500 difference in total interest, $1,650 of which I would spend/lose up front in paying the points. So only a $2,850 savings after 15 years. That small savings for me is worth just holding/investing the $1,650 instead.

Meanwhile, if gambling for another refi, the 15-year make more sense as they come with greater credits. The 2.875% 15-year is an extra $400 in credits vs. the 2.75% 15-year I chose. Much of this decision though is based on my small loan size. Assuming the same numbers, if I had a $500k mortgage, I would be deciding differently.

Basically, my 15-year rate table is as follows:
A + B + C + E - credits in J - Amex credit @ Rate

Code: Select all

$ 2,100 @ 2.125%
$   900 @ 2.25%
$   300 @ 2.375%
$  -200 @ 2.5%
$  -800 @ 2.625%
$-1,350 @ 2.75%
$-1,750 @ 2.875%
$-2,150 @ 3%
...
$-3,500 @ 3.875%

While my 30-year rate is:
A + B + C + E - credits in J - Amex credit @ Rate

Code: Select all

$ 2,000 @ 2.375%
$ 1,000 @ 2.5%
$   325 @ 2.625%
$   200 @ 2.75%
$  -650 @ 2.875%
$-1,150 @ 3%
...
$-4,850 @ 4.375%

[no_username]

Hi Everyone,

Our loan balance is currently $454,000 4% 26 yrs to go.

Lender Fi is no longer accepting application. Where else can we go to refinance?

Please advise.

Thank you!

https://app.lenderfi.com/

But I thought they’re not accepting anymore loan applications? Pls advise. Thanks so much!

Others have posted that they were successful submitting apps through the backdoor link despite LenderFi "not accepting more apps, obviously YMMV.

Wow thanks so much. Applying now. thank you!

Some people even tried this link but they could not apply bc they were told that they are not accepting new application. But I did not try so maybe not.

[BrandonBogle]

Some people even tried this link but they could not apply bc they were told that they are not accepting new application. But I did not try so maybe not.

That's news to me. I don't think I noticed anyone in this thread, the "My LenderFi refinance is going well" thread, or the Slickdeals thread say they couldn't apply using the backdoor link. Now, a few said they got ask how they heck they got their app in, but weren't prevented from proceeding.

[no_username]

Some people even tried this link but they could not apply bc they were told that they are not accepting new application. But I did not try so maybe not.

That's news to me. I don't think I noticed anyone in this thread, the "My LenderFi refinance is going well" thread, or the Slickdeals thread say they couldn't apply using the backdoor link. Now, a few said they got ask how they heck they got their app in, but weren't prevented from proceeding.

It showed up as an Ad in my facebook page.

[anon_investor]

What is the breakeven time between:
-the 15yr 2.375% and 2.5%
-the 30yr 2.75% and 2.875%

Using the 2.75% 15-year that I locked as a baseline:
15-year @ 2.375% = 42 months
15-year @ 2.5% = 44 months
30-year @ 2.75% & 2.875% = never, as there is no interest savings. Costs $1,500 extra compared to 15-year of the same rate.

Instead using 2.875% as a 30-year baseline:
2.875% 30-year closing costs = $650 in my pocket
2.75% 30-year vs. 2.875% 30-year breakeven = 64 months

All the above are using an amortization table with $0 paid extra during the entire term. At 3.5 - over 5 years before I'm ahead by the lower rate, 2.75% 15-year or 2.875% 30-year is the sweet spot for the rate options available to me.

Please note, the numbers I have been sharing are actually going to end up cheaper. I am going to finance the closing costs and take out just shy of $2k, so my lender credits should increase as I only have a $150k loan.

If you plan no further refis, the 15yr @ 2.375% looks good based on the world of a Fannie/Freddie 0.5% fee.

If you plan to gamble on another refi, then obviously the 30yr @ 2.875% is optimal.

Are you planning another refi ?

Given the current rate environment, I am not planning another refi. However, I still wouldn't do the 2.375%. A 3.5 year payback vs. the 2.75% is not worth it to me. Over 15 years, we are only talking a $4,500 difference in total interest, $1,650 of which I would spend/lose up front in paying the points. So only a $2,850 savings after 15 years. That small savings for me is worth just holding/investing the $1,650 instead.

Meanwhile, if gambling for another refi, the 15-year make more sense as they come with greater credits. The 2.875% 15-year is an extra $400 in credits vs. the 2.75% 15-year I chose. Much of this decision though is based on my small loan size. Assuming the same numbers, if I had a $500k mortgage, I would be deciding differently.

Basically, my 15-year rate table is as follows:
A + B + C + E - credits in J - Amex credit @ Rate

Code: Select all

$ 2,100 @ 2.125%
$   900 @ 2.25%
$   300 @ 2.375%
$  -200 @ 2.5%
$  -800 @ 2.625%
$-1,350 @ 2.75%
$-1,750 @ 2.875%
$-2,150 @ 3%
...
$-3,500 @ 3.875%

While my 30-year rate is:
A + B + C + E - credits in J - Amex credit @ Rate

Code: Select all

$ 2,000 @ 2.375%
$ 1,000 @ 2.5%
$   325 @ 2.625%
$   200 @ 2.75%
$  -650 @ 2.875%
$-1,150 @ 3%
...
$-4,850 @ 4.375%

Ah, in that case the 15yr @ 2.5% probably makes the most sense then, no? The lowest no cost rate available to you.

[BrandonBogle]

Ah, in that case the 15yr @ 2.5% probably makes the most sense then, no? The lowest no cost rate available to you.

Not at the moment, but maybe as the credits change? The difference in costs / savings in interest mean 44 months before I’m ahead. While I’m in this house for the long term, it’s an even longer payback than the 2.375%.

The only reason I have pause for those two rates was because I made that decision on refi # 1. I had 2.875% with $1k in my pocket or 2.625% at no cost. I went with the 2.625% and 60 days later found 2.25%.

So while I don’t plan on refi’ing, 2.75% puts me in a place I can accept long-term, but also jump if rates go back down. Refi # 2 was $2,200 for 2.25% at Watermark or $1,100 for 2.375% at loan Depot. If I can get to 2.25% at around $1k in closing costs, I’d do refi # 4 lol.

Meanwhile, the $6,200 in profit on refi 2, the $1,350 in profit on refi # 3, and the $3k I’ve added to my principal without making it a cash out cover most of my solar install. It actually fully covers the solar itself, but not the tree I’ve removed or the electrical panel upgrade I had done.

So in January I was at 2.875% adjustable and no solar, to being at 2.75% fixed and having solar by December. 2020 had a silver lining! Lol

[anon_investor]

Ah, in that case the 15yr @ 2.5% probably makes the most sense then, no? The lowest no cost rate available to you.

Not at the moment, but maybe as the credits change? The difference in costs / savings in interest mean 44 months before I’m ahead. While I’m in this house for the long term, it’s an even longer payback than the 2.375%.

The only reason I have pause for those two rates was because I made that decision on refi # 1. I had 2.875% with $1k in my pocket or 2.625% at no cost. I went with the 2.625% and 60 days later found 2.25%.

So while I don’t plan on refi’ing, 2.75% puts me in a place I can accept long-term, but also jump if rates go back down. Refi # 2 was $2,200 for 2.25% at Watermark or $1,100 for 2.375% at loan Depot. If I can get to 2.25% at around $1k in closing costs, I’d do refi # 4 lol.

Meanwhile, the $6,200 in profit on refi 2, the $1,350 in profit on refi # 3, and the $3k I’ve added to my principal without making it a cash out cover most of my solar install. It actually fully covers the solar itself, but not the tree I’ve removed or the electrical panel upgrade I had done.

So in January I was at 2.875% adjustable and no solar, to being at 2.75% fixed and having solar by December. 2020 had a silver lining! Lol

Now I get it! I forgot that with your lower loan balance, the calculus is a lot different. I get your thinking now. 15yr @ 2.75% makes a lot of sense then, enjoy that solar. Best of luck!

[just_me]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Who is the lender?

[BrandonBogle]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Who is the lender?

The answer you seek is on the same page as the question you ask. About halfway down page 109.

[Soares1234]

Quick question on my LenderFi closing. On my closing docs it says the payoff to my old lender is $531K in the payments and payoffs section. However, when I look at my account with my old lender it says that they received $528K. I initially thought the $531K was high but didn't worry about it because I figured they would just pay the old lender the higher amount and it would then get refunded to me. Any idea where the extra $3K went and will I somehow get this money back or do I need to chase it down?

Check the statement date. It could be the timing from when you paid the current months mortgage and when the payoff value was generated. You will get a refund.

[just_me]

Today I was offered 15-year all the way down to 2.125%, with 2.5% ending up with $200 in my pocket or 2.375% ending up with $300 in closing costs.

Or, on the 30-year, I had options all the way down to 2.375%, with 2.75% at $150 in closing costs or 2.875% for $650 in my pocket after all credits.

Both options above are without an escrow account.

Decisions, decisions!

Who is the lender?

The answer you seek is on the same page as the question you ask. About halfway down page 109.

Thank you, I found it. I see that your post is dated today, but Better told me a week ago the Amex credit was no longer being offered. Is this not accurate?

[KeepinItPositive]

Loan cabin is currently advertising 2.375/30 from their website.

Has anyone gotten this in the last week or so from them? Is there a catch lurking?

[bgh11]

Loan cabin is currently advertising 2.375/30 from their website.

Has anyone gotten this in the last week or so from them? Is there a catch lurking?

May have to pay point to get such rate. The biggest catch is to get someone to call or email you back.

[chet96]

Need some advice here.

I’m looking to refinance now and the again in about year to pull out some equity for a renovation.

Is there any advantage to doing a 20 year versus a 30 for such a short period? The offered rate is the same and lender credit is within 200. Running an amortization table shows the 20 year paying off about 8k more balance over 1 year. (Is balance the right number to look at?)

We are 4 years into our current loan. And can drop the payment significantly with a new 30 and a small increase on the 20.

Thanks.

[bgh11]

How much do u need for reno?
If only $200 less in credit, I’d do 30 for lower monthly payment. I can always pay a 30yr like a 20 yr by making additional principal payments.

Need some advice here.

I’m looking to refinance now and the again in about year to pull out some equity for a renovation.

Is there any advantage to doing a 20 year versus a 30 for such a short period? The offered rate is the same and lender credit is within 200. Running an amortization table shows the 20 year paying off about 8k more balance over 1 year. (Is balance the right number to look at?)

We are 4 years into our current loan. And can drop the payment significantly with a new 30 and a small increase on the 20.

Thanks.

[BrandonBogle]

Thank you, I found it. I see that your post is dated today, but Better told me a week ago the Amex credit was no longer being offered. Is this not accurate?

I applied on the last day the promo was available, but I didn't pursue it at that time. Better closes out applications that aren't locked at the 30-day mark, so I waited 28 days before proceeding with it as I was waiting for my prior refi to complete.

[BrandonBogle]

How much do u need for reno?
If only $200 less in credit, I’d do 30 for lower monthly payment. I can always pay a 30yr like a 20 yr by making additional principal payments.

Need some advice here.

I’m looking to refinance now and the again in about year to pull out some equity for a renovation.

Is there any advantage to doing a 20 year versus a 30 for such a short period? The offered rate is the same and lender credit is within 200. Running an amortization table shows the 20 year paying off about 8k more balance over 1 year. (Is balance the right number to look at?)

We are 4 years into our current loan. And can drop the payment significantly with a new 30 and a small increase on the 20.

Thanks.

This. At a $200 difference, the flexibility, especially while doing renovations, is worthwhile. Is the plan here to do a cash-out refi now and then do another in 6-12 months to hopefully lower the rate due to the penalty for the cash out?

If you can swing it, I would only consider a 30-year or 15-year, or a Third Federal 10-year or adjustable as they offer a $300 closing cost refi. As bgh is alluding to, much of this really depends on how much you want to take out. There is another thread here were someone wanted to pull out $80k via a cash out for a pool on an existing $280k mortgage (forgive me if I got those numbers slightly wrong here, I'm only on my first cup of coffee). They got offered 2.875% on the refi for very low closing costs, but if they didn't do the cash out, the rate would be 2.375%. For a 0.5% spread, I recommended actually doing a straight refi for the $280k and taking a second mortgage/HELOC for the renovation. Even if that part is at 3%, you come out ahead as the majority is at 2.375%.

So keep such ideas in mind.

[need403bhelp]

Loan cabin is currently advertising 2.375/30 from their website.

Has anyone gotten this in the last week or so from them? Is there a catch lurking?

When I applied their rate was within 0.125% of their website.

The catch is they are backed up so they won’t actually get back to you once you apply for weeks and then can take 60 days to close.

Their advertised rates are zero points and there are no lender fees.