Need Advice: Loan Depot Refi

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Need Advice: Loan Depot Refi

Post by stanford73 » Tue Apr 28, 2020 4:56 pm

DH and I are looking to refinance our mortgage, including an $80k HELOC payoff, from a 3.9% interest rate to 3.1%. I would greatly appreciate your thoughts/advice on the following loan estimate from Loan Depot. Should we lock in this rate now?

Please let me know if I've missed any info. Thank you!

Loan Terms

Loan Amount $431,000
Interest Rate 3.125%

Monthly Principal & Interest
See Projected Payments below for your
Estimated Total Monthly Payment $1,846.30

Estimated Closing Costs $4,652 Includes $2,822 in Loan Costs + $2,864 in Other Costs - $1,034

Estimated Cash to Close $1,232 Includes Closing Costs. See Calculating Cash to Close on page 2 for details.

Closing Costs

Recording Fees and Other Taxes $158
Transfer Taxes
Homeowner's Insurance Premium ( months)
Mortgage Insurance Premium ( months)
Prepaid Interest ($36.90 per day for 14 days @ 3.125%) $517
Property Taxes ( months)
Homeowner's Insurance $45.00 per month for 6 mo. $270
Mortgage Insurance per month for mo.
Property Taxes $479.67 per month for 4 mo. $1,919

Loan Amount $431,000
Total Closing Costs (J) -$4,652
Estimated Total Payoffs and Payments -$427,580
Estimated Cash to Close From To Borrower $1,232
Estimated Closing Costs Financed
(Paid from your Loan Amount) $3,420

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Re: Need Advice: Loan Depot Refi

Post by kelvan80 » Fri May 22, 2020 9:32 pm

How many years do you have left on your original mortgage? It seems from another thread that these last refund was done 20 years ago. Not sure if it's worth it to add $4k in closing costs to this loan. How is the rest of the debt payoff going?

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Re: Need Advice: Loan Depot Refi

Post by BrandonBogle » Fri May 22, 2020 11:36 pm

We don't know how much longer you have left on your old loan (though we know you have $427,580 as the outstanding balance) and if 3.9% is your blended yield between the mortgage and the HELOC. So, this will have some guestimation based on 30 years at either 3.875% vs. 3.125%.

Costs = $4,652 - $1,919 (taxes) - $270 (insurance) - $517 prepaid interest + interest on $3,420 ($431k - $427,580),
or $1,946 + 1987.62 (30 years @ 3.125% for $3,420) = $3,933.62

A. $427,580 @ 3.875% for 12 months = $16,566.39 cumulative interest
B. $431,000 @ 3.125% for 12 months = $13,476.63 cumulative interest
Difference of $3,089.76 in 12 months

A @ 18 months = $20,044.04
B @ 18 months = $24,669.82
Difference of $4,625.78 in 18 months

Using these rough numbers, it seems payback is in less than 18 months. That is great. Just sucks that you are financing some of the closing costs vs. paying them out of pocket.

I would DEFINITELY lock this rate and proceed. While I detest origination fees, this is still a very competitive offer. And locking doesn't mean you can't still shop around for lower closing costs (or a better rate).

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