Home Refinance-Need Math Help!

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Jcwcable
Posts: 22
Joined: Wed Jan 23, 2013 11:50 am

Home Refinance-Need Math Help!

Post by Jcwcable » Mon Jun 29, 2020 6:37 am

Here's our scenario:

House bought in July 2015 on a 30 year 4.0% fixed rate mortage. The original house assessment was $242,500, we took out a loan for $223,250. Our county now assess our home at 280k and zillow has it at 329k.

The current principal balance is $202,705.62. The monthly principal and interest payment is $1065.83, Escrow for property tax is 495.67, escrow for insurance is 117.63. We also pay $87.44 on PMI each month which I anticipate to go away based on the new value of the home.

Refinancing appears to be a no brainer but here's what I cannot process in my mind now matter how many calculators I use online. How much should I be putting down in closing costs/points to decrease the interest rate. I am open to 20 or 25 year refi's, I don't think we could swing the monthly increase of a 15 year. Preferably the new monthly payment stays within $100/monthly either direction. Can someone please help me with the break even point math. We think we will be here for many years to come but if the break even is beyond 5 years I'm not sure I'll be super comfortable with it (depending on how much I'm losing out between fees and equity). Another question would be - calculate the break even point with AND without rolling the fees into the loan. I think we could comfortably pay 4k-5k in fees in cash, on the other hand $7800+ in fees would probably have to be rolled into the loan. Any advice is greatly appreciated, I would love to get this done sooner than later!

Here are a few sample rates I've snagged from Credible 25 year fixed:
Company Monthly Payment Interest APR Loan Cost/Fees
Stearns 906 2.50 2.83 7,833
Caliber 919 2.625 2.885 6,303
Caliber 937 2.80 2.967 4,233
Stearns 958 3.0 3.114 2,991
Caliber 984 3.25 3.328 1,059
Caliber 1,006 3.45 3.53 -90

Credible 20 Year Fixed:
Stearns 1,070 2.50 2.874 7,318
Stearns 1,083 2.625 2.905 5,619
Stearns 1,108 2.875 3.024 3,213
Stearns 1,120 3.0 3.11 2,488
Caliber 1,146 3.25 3.345 878
Caliber 1,166 3.45 3.547 -213

dukeblue219
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Joined: Fri Jan 29, 2016 12:40 pm

Re: Home Refinance-Need Math Help!

Post by dukeblue219 » Mon Jun 29, 2020 6:46 am

Have you looked at Lenderfi? You should be able to get under or closer to 3% without paying much or anything out of pocket on a 30 year. Only thing I'm thinking is your balance may be too low for the cheapest loans.

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BrandonBogle
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Joined: Mon Jan 28, 2013 11:19 pm

Re: Home Refinance-Need Math Help!

Post by BrandonBogle » Mon Jun 29, 2020 8:28 am

In today’s refi market, it is probably better to focus on getting a 30-year and paying it like a 20 or 25-year. You may end up cheaper that way due to the competitive offers recently outlined in the refinance mega thread.

The simplest way is, when looking at the same term, to divide the point cost by the payment difference from one of these loans to the next and get a rough payback on the points.

The proper way would be to build amortization tables and see when the interest savings covers the cost of the points.

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