Refinancing

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BuyandHold37
Posts: 26
Joined: Wed Apr 25, 2018 9:29 am

Refinancing

Post by BuyandHold37 » Fri Feb 07, 2020 2:26 pm

I am currently 7 years into a 30 year fixed @ 4.25%. Owe about $260,000, house is worth around $730,000.

I do not want to take out any cash, but am seeing these low refinance rates in the mid 3% range.

My question, is it worth the fees, etc. to refinance at say 3.5%? Or should I leave well enough alone?

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ResearchMed
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Re: Refinancing

Post by ResearchMed » Fri Feb 07, 2020 4:01 pm

BuyandHold37 wrote:
Fri Feb 07, 2020 2:26 pm
I am currently 7 years into a 30 year fixed @ 4.25%. Owe about $260,000, house is worth around $730,000.

I do not want to take out any cash, but am seeing these low refinance rates in the mid 3% range.

My question, is it worth the fees, etc. to refinance at say 3.5%? Or should I leave well enough alone?
Figure out the difference in monthly payment, and then figure how many months it would take to pay off any closing costs.
That should help you decide.
And even better if you can find a refi without any costs.
(We just did this, and were notified that the old HELOC was paid off today. Our new costs are much lower. :happy )

RM
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Topic Author
BuyandHold37
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Joined: Wed Apr 25, 2018 9:29 am

Re: Refinancing

Post by BuyandHold37 » Fri Feb 14, 2020 8:49 am

Decided it was not worth it. It would have lowered my payment from $2,700 to $2,400, but the closing costs and extending the note 7 years convinced me to stay the course. Thanks for your reply

FreemanB
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Re: Refinancing

Post by FreemanB » Fri Feb 14, 2020 8:55 am

What would be the effect if you kept paying the $2700 you are paying now? That's where refinancing will really save you money.

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simplesimon
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Re: Refinancing

Post by simplesimon » Fri Feb 14, 2020 9:00 am

I bet you can get a no-cost refi for a lot lower rate than what you're paying now if you're willing to do the legwork and shop it hard.

jharkin
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Re: Refinancing

Post by jharkin » Fri Feb 14, 2020 9:15 am

simplesimon wrote:
Fri Feb 14, 2020 9:00 am
I bet you can get a no-cost refi for a lot lower rate than what you're paying now if you're willing to do the legwork and shop it hard.
+1000

Shouldn't even take much legwork. I just did a superconforming refi from 4.125 to 3.75. break even was only 10 months.

On a low DTI conventional you should be able to get 3.5 or even 3.25 easily. Use a vendor linke Aimloan or the Costo mortgage program and the closing costs shouldnt be more than ~300-500+ title and doc fees. You might even get 3.5 no cost.

re: duration. You can take the new 30, but just keep paying your current 2700/mo. At the lower rate it will just payoff years earlier.


Another thing to look at is 15 year mortgages. You might be able to get under 3% and given you only have 23 years left on the current note the payment might be similar and really accelerate your payoff....

Dottie57
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Re: Refinancing

Post by Dottie57 » Fri Feb 14, 2020 9:24 am

jharkin wrote:
Fri Feb 14, 2020 9:15 am
simplesimon wrote:
Fri Feb 14, 2020 9:00 am
I bet you can get a no-cost refi for a lot lower rate than what you're paying now if you're willing to do the legwork and shop it hard.
+1000

Shouldn't even take much legwork. I just did a superconforming refi from 4.125 to 3.75. break even was only 10 months.

On a low DTI conventional you should be able to get 3.5 or even 3.25 easily. Use a vendor linke Aimloan or the Costo mortgage program and the closing costs shouldnt be more than ~300-500+ title and doc fees. You might even get 3.5 no cost.

re: duration. You can take the new 30, but just keep paying your current 2700/mo. At the lower rate it will just payoff years earlier.


Another thing to look at is 15 year mortgages. You might be able to get under 3% and given you only have 23 years left on the current note the payment might be similar and really accelerate your payoff....

Agree especially with paying same amount. Dinkytown.net has some very nice mortgage calculators which may interest you.

aerosurfer
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Re: Refinancing

Post by aerosurfer » Fri Feb 14, 2020 10:43 am

BuyandHold37 wrote:
Fri Feb 14, 2020 8:49 am
Decided it was not worth it. It would have lowered my payment from $2,700 to $2,400, but the closing costs and extending the note 7 years convinced me to stay the course. Thanks for your reply
What's your Principal and interest portion of that payment?
Aimloan.com has some stellar rates

30 for 3.375. P&I about $1150

20 for 3.25 P&I 1475

15 for 3.0 P&I just under 1800

majiaknight
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Re: Refinancing

Post by majiaknight » Fri Feb 14, 2020 2:53 pm

I'd suggest you keep trying to quote. The rate has been improving recently.

On Monday I just locked my refinance conforming loan ($560K) of 15Y fixed at 2.875% from BOA. It's a no cost refi w/ no points required as all the credits I got (including boa platinum honors discount) would cover almost all the cost. I'm in CA.

mega317
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Re: Refinancing

Post by mega317 » Fri Feb 14, 2020 3:31 pm

Yes there is often not a huge difference between actually refinancing, and just paying the new payment on your current loan.

As an example my P&I on my original 30 year at 3.875% is $3,000. I have 27 years left.
Refinancing to 15 years 3% increases my payment by $1200 and obviously pays off the mortgage 12 years sooner.
Keeping my current mortgage and just adding the $1200/month pays me off 11 years sooner, just 1 year difference. There's still a clear difference but it's close-ish. That way does give you a more flexibility too.
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