Mortgage Refinance Fees

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StarsandStripes
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Mortgage Refinance Fees

Post by StarsandStripes » Thu May 28, 2020 5:31 pm

A family member wishes to refinance their current home mortgage. The value of the house is about 275,000 and the loan balance is about 175,000. The current rate is 4.6% for 30 years with 28 years remaining. The credit score is around 750. The new rate would be 3.5% with origination fees of just under $5000.

I just read several threads where people had jumbo loans and only paid $5000 or so in fees. Are the fees on a 175000 dollar loan the same as a big loan.

Should I advise the family member to take this or shop around?

Lindyhopper
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Re: Mortgage Refinance Fees

Post by Lindyhopper » Thu May 28, 2020 5:36 pm

You should always shop. Very smart to look at the fees, some people are rate only motivated.

You can pay a fee (points) to have a lower rate, so it makes comparisons against the jumbo very difficult. Also, counties have their own fees, which can be high in some places.

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Nate79
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Re: Mortgage Refinance Fees

Post by Nate79 » Thu May 28, 2020 5:57 pm

Shop, shop shop. I used mortgage professor and Costco. I try to always have a no fee refinance (ie lender credits cover all mortgage costs excluding escrow and prepaid interest).

dukeblue219
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Re: Mortgage Refinance Fees

Post by dukeblue219 » Thu May 28, 2020 5:59 pm

A lot of the traditional big banks and CUs have pretty nasty origination fees that don't exist with online lenders. Since it's just a refi why not give one a shot? It's not like a purchase when you might (right or wrong) feel more comfortable with a local bank.

Don't assume thousands of dollars of origination fees are just how business is done.
Last edited by dukeblue219 on Thu May 28, 2020 6:06 pm, edited 1 time in total.

xerxes101
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Re: Mortgage Refinance Fees

Post by xerxes101 » Thu May 28, 2020 6:01 pm

StarsandStripes wrote:
Thu May 28, 2020 5:31 pm
The new rate would be 3.5% with origination fees of just under $5000.
Does not seem like a good deal based on what I am reading on the Refinance Mega Thread.

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Stinky
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Location: Sweet Home Alabama

Re: Mortgage Refinance Fees

Post by Stinky » Thu May 28, 2020 6:02 pm

StarsandStripes wrote:
Thu May 28, 2020 5:31 pm
A family member wishes to refinance their current home mortgage. The value of the house is about 275,000 and the loan balance is about 175,000. The current rate is 4.6% for 30 years with 28 years remaining. The credit score is around 750. The new rate would be 3.5% with origination fees of just under $5000.

I just read several threads where people had jumbo loans and only paid $5000 or so in fees. Are the fees on a 175000 dollar loan the same as a big loan.

Should I advise the family member to take this or shop around?
interest savings @ 1.1% are about $1,900 per year. So the payback with $5,000 in fees is over 2.5 years.

My personal threshold for refinancing was always payback in 2 year. So I would not take this.

Shop harder. Either get a lower rate or lower closing costs.
It's a GREAT day to be alive - Travis Tritt

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anon_investor
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Re: Mortgage Refinance Fees

Post by anon_investor » Thu May 28, 2020 6:08 pm

xerxes101 wrote:
Thu May 28, 2020 6:01 pm
StarsandStripes wrote:
Thu May 28, 2020 5:31 pm
The new rate would be 3.5% with origination fees of just under $5000.
Does not seem like a good deal based on what I am reading on the Refinance Mega Thread.
+1. This seems like a bad deal.

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gas_balloon
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Re: Mortgage Refinance Fees

Post by gas_balloon » Thu May 28, 2020 6:11 pm

Check owning.com and Lenderfi.com
The rate for your friend looks good, but the fees/cost seem very high. I would never do a re-fi with $5K fees!

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BrandonBogle
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Re: Mortgage Refinance Fees

Post by BrandonBogle » Thu May 28, 2020 6:31 pm

I know you put “origination fees” in your post, but did you actually look at the Loan Estimate or did the family member simply tell you this? I ask because often people look at the overall closing costs, including escrow prepaids, and consider that what their closing costs for the new mortgage is.

We know better, but the family member might not.

If that $5k is indeed for origination fees, then that is definitely not a competitive offer overall. As others said, shop around.

Topic Author
StarsandStripes
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Re: Mortgage Refinance Fees

Post by StarsandStripes » Thu May 28, 2020 6:55 pm

I should have said total closing costs. Escrow funding is not included. Thank you.

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BrandonBogle
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Re: Mortgage Refinance Fees

Post by BrandonBogle » Thu May 28, 2020 6:56 pm

StarsandStripes wrote:
Thu May 28, 2020 6:55 pm
I should have said total closing costs. Thank you.
What are the costs for Section A, B, C? Also include an lender credits in Section J.

mogg
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Re: Mortgage Refinance Fees

Post by mogg » Thu May 28, 2020 8:32 pm

For a particular rate, fees are generally smaller on a larger loan than a smaller loan. The bigger the loan, the bigger the profit for the lender, so lenders are generally willing to give more lender credits on larger loans.

175000 is a small loan, so you won't find as great deal like others on the forum, but you should be able to find a no cost loan for about 3.5%.

jb1
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Re: Mortgage Refinance Fees

Post by jb1 » Thu May 28, 2020 8:37 pm

Whole process is stressful tbh

Absolute
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Re: Mortgage Refinance Fees

Post by Absolute » Thu May 28, 2020 9:03 pm

Many variables at play but just for an example, I am closing next week on refi with new 20 year fixed @ 3.125% on 198k loan with market value 270k. Original loan was 30 year fixed @ 4.33% (25 years left this October). Out of pocket costs is ~2k after shopping for title services and $400 lender credit. Definitely shop around for rates, credits, title services. This is in NJ.

Bratbill
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Re: Mortgage Refinance Fees

Post by Bratbill » Thu May 28, 2020 9:06 pm

Don’t you have credit unions ?
Just refinanced 105k from 10 years left at 3.175 to 8 year express loan @2.8
WITH NO FEES or COSTS .....

Couple phone calls and literally signed papers in drive thru.

No Stress !

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