I see there are many other refi threads, and I've read many of them, but wow does it get overwhelming trying to process all that information and try to figure out how other people's situations compare to our own. I'd really appreciate some outside opinions about our specific situation.
The question in a nutshell is: for a sub 200k loan at 3.125% which you intend to pay off in 10 years, how much of a rate decrease is needed before it feels worth it to you? And, would you pay points to lower the rate, or shoot for a the best rate you can get with 0 points?
- Single family detached, primary residence
- I've been using 500k as approximate value (rounding down a health chunk from Zillow)
- We plan on being here at least another 10 years
- 15 year fixed at 3.125%
- Remaining balance: 175k
- Payment: 1740 (no escrow)
- About 10 years remaining on the loan
- Reduce payment, but still pay off on roughly the same timeline
- Save interest costs over the life of the loan
- Minimize loan fees and so on
- We make enough money that there should be no question we can make the payment.
- Credit score is 800+
- Rocket Mortgage could get as low as 2.25% on a 10 year, but by paying significant points (total closing costs were $6900). Paying no points the rate was 2.875% (total closing costs $3000). They claimed they could get as low as 1.99% on a 15 year (again, paying significant points).
- Better.com had worse rates for higher closing costs.
- Loandepot.com had rates similar to Rocket, but with much higher closing costs.
- A local credit union shows a rate of 2.5% for a 15 year loan -- but I'd probably have to call them to get details on 10 year loans or my specific situation.
- My favorite online experience so far was aimloan.com, which gave estimates without having to submit a lot of information. For a 10 year loan with no escrow, they offered 2.625% with $995 closing costs, estimating payments of $1654 (so, $88 less a month, which I guess pays the closing costs in about a year?)
Thanks for any insights you can offer!