Which refi would save me more?

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Topic Author
jmac2007
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Which refi would save me more?

Post by jmac2007 »

I currently owe $126k on a 30 year at 4%. With the lower rates I'm looking at refinancing. That and hopefully get away from Wells fargo and into a credit union.I'm 5 years in but only have 17 years left due to extra payments. I don't plan on making many more extra payments or else i'd stay with what I have and pay it down. I plan on being here at another 6 years if not more. These are my offers, all 15 years fixed

Mortgage broker

2.375 % $5,195 closing cost $912 a month

Wells Fargo

2.375 % $3,930 closing cost $859 a month

Sun coast credit union

3 % no closing cost $870 a month

Thanks for any help!
BashDash
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Re: Which refi would save me more?

Post by BashDash »

I'm interested as well. Very similar situation.
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FrugalProfessor
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Re: Which refi would save me more?

Post by FrugalProfessor »

I created a refi spreadsheet here that might help you decide: https://frugalprofessor.com/mortgage-re ... fi-review/
I blog. Taxes are the lowest hanging source of alpha. I eat tax alpha for breakfast.
jmorgans
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Re: Which refi would save me more?

Post by jmorgans »

I can’t think of any reason to go with the mortgage broker over Wells Fargo. If you hate WF that much then bring the WF loan estimate to the mortgage broker and ask him or her to beat it. I doubt the 3% no closing cost rate makes any sense mathematically unless you are planning on selling and moving in the next few years.
jmorgans
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Re: Which refi would save me more?

Post by jmorgans »

Also keep in mind that mortgage loans get sold all the time, so the bank you borrow from is not necessarily the bank that is going to service your loan long term. Also, the mortgage broker is representing a bank which could very well BE Wells Fargo. Wouldn’t you feel silly if you went with the broker and that ended up to be the case?
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Watty
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Re: Which refi would save me more?

Post by Watty »

jmac2007 wrote: Mon Sep 14, 2020 5:14 pm Wells Fargo

2.375 % $3,930 closing cost $859 a month

Sun coast credit union

3 % no closing cost $870 a month
Pay almost $4K to save $11 a month? Nope.

Of those three choices the credit union is an easy choice. With the pandemic, election, and all the general weirdness going on in the world I would go on and do that ASAP so that you can lock in that rate just in case the low rates don't last. But that is just me being cautious and feeling uneasy about what is going on.

I would assume that you looked around and did not find any better no cost loans. If so what you may be running into is that your loan amount is relatively low so it is harder for a lender to cover the closing costs that they pay for. If you had a $400K mortgage then you might be able to find one of the lower interest rate no cost loans that people have posted about.
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#Cruncher
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Re: Which refi would save me more?

Post by #Cruncher »

jmac2007 wrote: Mon Sep 14, 2020 5:14 pmI currently owe $126k ... These are my offers, all 15 years fixed
  • Mortgage broker
    2.375 % $5,195 closing cost $912 a month
  • Wells Fargo
    2.375 % $3,930 closing cost $859 a month
  • Sun coast credit union
    3 % no closing cost $870 a month
The $912 monthly payment for the Mortgage broker quote appears to reflect a charge greater than the $5,195 closing cost, jmac. Using the Excel PMT function and assuming the closing cost is added to the $126,000 loan balance, I confirm the monthly payments for the Well Fargo and Sun Coast quotes, but get $45 less for the Mortgage broker one.

Code: Select all

 Rate    Fee   Payment   Formula
------  -----  -------   -------
2.375%  5,195   867.10  =PMT(2.375% / 12, 15 * 12, -(126000 + 5195), 0, 0)
2.375%  3,930   858.73  =PMT(2.375% / 12, 15 * 12, -(126000 + 3930), 0, 0)
3.000%      0   870.13  =PMT(3.000% / 12, 15 * 12, -(126000 +    0), 0, 0)
GT99
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Re: Which refi would save me more?

Post by GT99 »

You should have noted that you're rolling closing costs into the loan amount. If you don't roll them in, the difference is $37/month, which would give you an almost 9 year break-even on the WF option if you paid the closing costs up front.

Are you sure you're comparing apples to apples here? Something doesn't seem right. By closing costs, are you just including points/fees from the bank and not taxes and other costs? $3930 on a $126k loan is over 3%. I'm not that familiar with mortgages that low, but that's really high - feel like it has to include taxes, etc, and the way you rolled it in seems like that's right, whereas on the 3% CU option they are actually giving you a credit to cover taxes, etc. Is that right?

Also, why would you even present the mortgage broker as on option? Same rate, higher closing costs. It's like asking someone if they should pay $25k for a brand new car or $23k for the exact same model someplace else.
ossipago
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Re: Which refi would save me more?

Post by ossipago »

Have you checked rates at the lenders most often mentioned here - LoanDepot, LenderFi (their quick rates are higher than the actual rates they offer after an application), LoanCabin (if it operates in your state), Better?
OClarry
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Re: Which refi would save me more?

Post by OClarry »

Can you share how much your current monthly mortgage at 30 years & 4%? That will help determine which option has the highest yield when refinancing.
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

My current payment is $860 not including taxes and insurance.

And to the person earlier yes I'm rolling the closing cost into the loan.

My thing is wouldn't it be whoever offers the lowest monthly payment save me the most regardless of the rate?
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

ossipago wrote: Mon Sep 14, 2020 9:16 pm Have you checked rates at the lenders most often mentioned here - LoanDepot, LenderFi (their quick rates are higher than the actual rates they offer after an application), LoanCabin (if it operates in your state), Better?
I tried lender fi but it asked for my social. Wouldn't that result in a hard pull?
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

bump for info
MrJedi
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Re: Which refi would save me more?

Post by MrJedi »

jmac2007 wrote: Tue Sep 15, 2020 7:29 am
ossipago wrote: Mon Sep 14, 2020 9:16 pm Have you checked rates at the lenders most often mentioned here - LoanDepot, LenderFi (their quick rates are higher than the actual rates they offer after an application), LoanCabin (if it operates in your state), Better?
I tried lender fi but it asked for my social. Wouldn't that result in a hard pull?
You can get unofficial estimates without a SSN/credit pull with their website tool on the home page.
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

MrJedi wrote: Tue Sep 15, 2020 12:52 pm
jmac2007 wrote: Tue Sep 15, 2020 7:29 am
ossipago wrote: Mon Sep 14, 2020 9:16 pm Have you checked rates at the lenders most often mentioned here - LoanDepot, LenderFi (their quick rates are higher than the actual rates they offer after an application), LoanCabin (if it operates in your state), Better?
I tried lender fi but it asked for my social. Wouldn't that result in a hard pull?
You can get unofficial estimates without a SSN/credit pull with their website tool on the home page.
The monthly payment estimates it gives me, are they after closing or would it cost more once I roll it in?
Golf maniac
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Re: Which refi would save me more?

Post by Golf maniac »

You determine the loan amount. If you want to roll in closing costs then that would increase the loan amount. If I were in your shoes I would Do the zero cost refi. As pointed out earlier it is only $11 more a month, if your information is correct. If the next best has 3930 in closing costs it would take a long time to make that up at $11 a month in savings.
JBTX
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Re: Which refi would save me more?

Post by JBTX »

jmac2007 wrote: Tue Sep 15, 2020 7:24 am My current payment is $860 not including taxes and insurance.

And to the person earlier yes I'm rolling the closing cost into the loan.

My thing is wouldn't it be whoever offers the lowest monthly payment save me the most regardless of the rate?

If you held the mortgage for the entire 15 years yes the lowest payment is best. But the problem is those high fees take a long time to breakeven, probably 5 years on the wf and 6-7 years on the higher one. For only $11 a month more I'd go the no fee route that gives you more flexibility.

Try provident funding. They quoted my 2.375% on a 140k loan, $3000 fees.
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

After reading some more of this forum I'm gonna see what lenderfi offers and then lastly check with better.
aerosurfer
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Re: Which refi would save me more?

Post by aerosurfer »

jmac2007 wrote: Wed Sep 16, 2020 7:39 am After reading some more of this forum I'm gonna see what lenderfi offers and then lastly check with better.

Current Aimloan.com customer, have been happy with them and their service (direct lender not sold), but am in process with Lenderfi for a refi. They had the best rates.

Absolutely right, rates/costs were cheaper than advertised once i applied and got 2 way communication. So far so good, closing in the next few weeks.

Dont get caught up in best interest rate, it has to be total cost to consider the best deal. 4k to refi seems high. Are you only looking at the loan costs, not also prepaid escrows? Remember you will get back what osnin your current loan escrow account
Topic Author
jmac2007
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Re: Which refi would save me more?

Post by jmac2007 »

Will it hurt my credit score to have multiple lenders pull my credit in a short period?
ossipago
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Re: Which refi would save me more?

Post by ossipago »

Generally, no, since credit scoring models consolidate pulls over a 14 or 45 day period.
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