Refinance Mega Thread

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Futbolista
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Re: Refinance Mega Thread

Post by Futbolista »

This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
hambone
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Re: Refinance Mega Thread

Post by hambone »

Futbolista wrote: Thu Aug 20, 2020 3:00 pm This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
I would go with the 2.875% no cost. That way if rates go down you don't lose $800 and can do another no cost refi. If rates go up then you still have a historically amazing interest rate.
mattvt15
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Re: Refinance Mega Thread

Post by mattvt15 »

trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

I am just reposting this to get some feedback.

When is the appropriate time to bail on a lender?

I have 2 locked LEs. Same rates, but one deal is $300 more expensive. However, this deal has $0 out of pocket and an appraisal waiver, where the other one has me paying for an appraisal (and dealing with it) out of pocket.

I am inclined to go with the slightly higher offer to avoid hassle,risk and out of pocket expense of appraisal, but when should I bail on the other to ensure I don't have an issue with the other one?

FWIW both are 2.5% and A+B+C+E minus lender credits they will cost $1k and $1300 respectively.
Xrayman69
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Re: Refinance Mega Thread

Post by Xrayman69 »

On 8/10 had all the baseline paperwork submitted to LoanDepot for conventional loan in which refinancing about 40% of “appraise” home value. “Appraise” because no appraisal requirement. Informed that all the “paper work is in”; credit check, income, investment and banking info, confirmation of remaining mortgage etc.

Locked rate at 2.25% for 15 years with about 2500 credit fro closing cost.

Any expectation when this should be progressing further? Person we are working with is Jerry (presumed from Southern California given the phone area code).
Cash is King
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Re: Refinance Mega Thread

Post by Cash is King »

JSDNJ wrote: Thu Aug 20, 2020 4:30 pm I am just reposting this to get some feedback.

When is the appropriate time to bail on a lender?
That's your call.

I have 2 locked LEs. Same rates, but one deal is $300 more expensive. However, this deal has $0 out of pocket and an appraisal waiver, where the other one has me paying for an appraisal (and dealing with it) out of pocket.

I am inclined to go with the slightly higher offer to avoid hassle,risk and out of pocket expense of appraisal, but when should I bail on the other to ensure I don't have an issue with the other one?

FWIW both are 2.5% and A+B+C+E minus lender credits they will cost $1k and $1300 respectively.
This seems like an easy decision. Good luck.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

Cash is King wrote: Thu Aug 20, 2020 4:52 pm
JSDNJ wrote: Thu Aug 20, 2020 4:30 pm I am just reposting this to get some feedback.

When is the appropriate time to bail on a lender?
That's your call.

I have 2 locked LEs. Same rates, but one deal is $300 more expensive. However, this deal has $0 out of pocket and an appraisal waiver, where the other one has me paying for an appraisal (and dealing with it) out of pocket.

I am inclined to go with the slightly higher offer to avoid hassle,risk and out of pocket expense of appraisal, but when should I bail on the other to ensure I don't have an issue with the other one?

FWIW both are 2.5% and A+B+C+E minus lender credits they will cost $1k and $1300 respectively.
This seems like an easy decision. Good luck.
I think so too, but I am debating when to tell the lender who requires an appraisal, to cancel the loan. I am afraid if I jump the gun and the other deal falls apart for some reason I will be stuck.
Cash is King
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Re: Refinance Mega Thread

Post by Cash is King »

JSDNJ wrote: Thu Aug 20, 2020 4:56 pm
Cash is King wrote: Thu Aug 20, 2020 4:52 pm
JSDNJ wrote: Thu Aug 20, 2020 4:30 pm I am just reposting this to get some feedback.

When is the appropriate time to bail on a lender?
That's your call.

I have 2 locked LEs. Same rates, but one deal is $300 more expensive. However, this deal has $0 out of pocket and an appraisal waiver, where the other one has me paying for an appraisal (and dealing with it) out of pocket.

I am inclined to go with the slightly higher offer to avoid hassle,risk and out of pocket expense of appraisal, but when should I bail on the other to ensure I don't have an issue with the other one?

FWIW both are 2.5% and A+B+C+E minus lender credits they will cost $1k and $1300 respectively.
This seems like an easy decision. Good luck.
I think so too, but I am debating when to tell the lender who requires an appraisal, to cancel the loan. I am afraid if I jump the gun and the other deal falls apart for some reason I will be stuck.
That's your decision but unless you have rock in your financials or a job loss the deal should not fall apart.
Futbolista
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Re: Refinance Mega Thread

Post by Futbolista »

hambone wrote: Thu Aug 20, 2020 3:27 pm
Futbolista wrote: Thu Aug 20, 2020 3:00 pm This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
I would go with the 2.875% no cost. That way if rates go down you don't lose $800 and can do another no cost refi. If rates go up then you still have a historically amazing interest rate.
I appreciate that. This afternoon I received a no cost 2.75% from a local lender making the decision a lot easier.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

Futbolista wrote: Thu Aug 20, 2020 5:09 pm
hambone wrote: Thu Aug 20, 2020 3:27 pm
Futbolista wrote: Thu Aug 20, 2020 3:00 pm This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
I would go with the 2.875% no cost. That way if rates go down you don't lose $800 and can do another no cost refi. If rates go up then you still have a historically amazing interest rate.
I appreciate that. This afternoon I received a no cost 2.75% from a local lender making the decision a lot easier.
Nice. Personally, I don't want to deal with the refi process again if I can help it so I am going with the lower rate which wound up costing a bit more. I was at 2.625 no cost, but am going with 2.5 for $1300.
ChiKid24
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Re: Refinance Mega Thread

Post by ChiKid24 »

mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

JSDNJ wrote: Thu Aug 20, 2020 7:14 pm I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
I got offered 1.875% on a 15-year today. Not at a price I’d be willing to pay, but it was offered.
VTECHUMP
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Re: Refinance Mega Thread

Post by VTECHUMP »

Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?
mattvt15
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Re: Refinance Mega Thread

Post by mattvt15 »

ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

BrandonBogle wrote: Thu Aug 20, 2020 7:17 pm
JSDNJ wrote: Thu Aug 20, 2020 7:14 pm I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
I got offered 1.875% on a 15-year today. Not at a price I’d be willing to pay, but it was offered.
Right but that speaks to his point. ANy lender can offer crazy low rates but charge you big prices. Obviously getting the best rate at no cost is ideal, but then you'll have to refi again if rates do go down. At these rates it's almost splitting hairs, which is why I chose to pay a grand or so for 2.5 and be done with it.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

VTECHUMP wrote: Thu Aug 20, 2020 7:24 pm Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?
At these rates no reason to pay them up front.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
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anon_investor
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Re: Refinance Mega Thread

Post by anon_investor »

JSDNJ wrote: Thu Aug 20, 2020 7:27 pm
BrandonBogle wrote: Thu Aug 20, 2020 7:17 pm
JSDNJ wrote: Thu Aug 20, 2020 7:14 pm I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
I got offered 1.875% on a 15-year today. Not at a price I’d be willing to pay, but it was offered.
Right but that speaks to his point. ANy lender can offer crazy low rates but charge you big prices. Obviously getting the best rate at no cost is ideal, but then you'll have to refi again if rates do go down. At these rates it's almost splitting hairs, which is why I chose to pay a grand or so for 2.5 and be done with it.
What is the break even on that $1.3k?
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

VTECHUMP wrote: Thu Aug 20, 2020 7:24 pm Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?
Why is E so high? This loan is costing you $3715 to get to 2.5%. I think you can do better.
JSDNJ
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Re: Refinance Mega Thread

Post by JSDNJ »

anon_investor wrote: Thu Aug 20, 2020 7:30 pm
JSDNJ wrote: Thu Aug 20, 2020 7:27 pm
BrandonBogle wrote: Thu Aug 20, 2020 7:17 pm
JSDNJ wrote: Thu Aug 20, 2020 7:14 pm I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
I got offered 1.875% on a 15-year today. Not at a price I’d be willing to pay, but it was offered.
Right but that speaks to his point. ANy lender can offer crazy low rates but charge you big prices. Obviously getting the best rate at no cost is ideal, but then you'll have to refi again if rates do go down. At these rates it's almost splitting hairs, which is why I chose to pay a grand or so for 2.5 and be done with it.
What is the break even on that $1.3k?
3 years when compared to my no cost 2.625% offer.
mattvt15
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Re: Refinance Mega Thread

Post by mattvt15 »

JSDNJ wrote: Thu Aug 20, 2020 7:30 pm
mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
exactly. To be honest, I totally get the mentality here to not pay anything. But I think that applies more when interest rates were in the 3.5% - 5% range. Now, just roll that money into the loan, as its basically free money. That's my opinion anyways and I'm typically very cheap :-)
VTECHUMP
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Re: Refinance Mega Thread

Post by VTECHUMP »

JSDNJ wrote: Thu Aug 20, 2020 7:31 pm
VTECHUMP wrote: Thu Aug 20, 2020 7:24 pm Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?
Why is E so high? This loan is costing you $3715 to get to 2.5%. I think you can do better.
E:
Recording Fees and Other Taxes: $97
Transfer Taxes: $850

I was thinking the same thing about doing better, but that 2.5% fixed rate is appealing. I'll attempt some negotiating with them tomorrow.

Thanks for the feedback.
mattvt15
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Re: Refinance Mega Thread

Post by mattvt15 »

JSDNJ wrote: Thu Aug 20, 2020 7:31 pm
VTECHUMP wrote: Thu Aug 20, 2020 7:24 pm Was just offered the following from New American Funding:

2.50% 30 year fixed, 63% LTV
A = $1,420
B = $213
C = $1,880
- a lender credit of $745

E=$947

I'm currently at 3.25% 30 year fixed. Should I take the above offer?

My loan estimate also has about $4000 of the closing costs rolled into the loan. I assume it is better to pay them up front, as long as I have the cash to pay them and plan on staying at this residence for the long term?
Why is E so high? This loan is costing you $3715 to get to 2.5%. I think you can do better.
Yeah, agreed. My E was $405 and $450 from LenderFi and LoanDepot, and my LTV is like 85%. See my post above. I'm at $4,758 for 2.375% rate for A+B+C+E. I probably could get better if I continued to negotiate, but I'm also perfectly happy with this outcome.
hbdad
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Re: Refinance Mega Thread

Post by hbdad »

A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
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anon_investor
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Re: Refinance Mega Thread

Post by anon_investor »

hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
hbdad
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Re: Refinance Mega Thread

Post by hbdad »

anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Agreed. But if they were to change the rate, wouldn't they need him to sign all the closing docs again with the new rate? What would be his recourse, if any, if he were to find out when he gets his first statement that the new loan is at 2.625?
akuseimark
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Re: Refinance Mega Thread

Post by akuseimark »

anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Yeah, nope. Mortgage company can produce a document showing 2.5% or no signature. While i’m sure he can use the closing paperwork to argue any difference in rate, it just isn’t worth having to deal with it if they do in fact bump the rate up.
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anon_investor
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Re: Refinance Mega Thread

Post by anon_investor »

hbdad wrote: Thu Aug 20, 2020 9:03 pm
anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Agreed. But if they were to change the rate, wouldn't they need him to sign all the closing docs again with the new rate? What would be his recourse, if any, if he were to find out when he gets his first statement that the new loan is at 2.625?
What date was on the "application" they asked him to sign?
hbdad
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Re: Refinance Mega Thread

Post by hbdad »

anon_investor wrote: Thu Aug 20, 2020 9:12 pm
hbdad wrote: Thu Aug 20, 2020 9:03 pm
anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Agreed. But if they were to change the rate, wouldn't they need him to sign all the closing docs again with the new rate? What would be his recourse, if any, if he were to find out when he gets his first statement that the new loan is at 2.625?
What date was on the "application" they asked him to sign?
I don't know and he's already asleep. I'll find out tomorrow. But let's assume it was dated today, wouldn't that be considered a new application such that they could not rely on closing docs that were signed 5 days ago? If it was dated 3 weeks ago, wouldn't the closing docs that were signed 5 days ago trump a rate on an application dated 3 weeks ago?
Bob_Sacamano
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Re: Refinance Mega Thread

Post by Bob_Sacamano »

Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
hbdad
Posts: 143
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Re: Refinance Mega Thread

Post by hbdad »

anon_investor wrote: Thu Aug 20, 2020 9:12 pm
hbdad wrote: Thu Aug 20, 2020 9:03 pm
anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Agreed. But if they were to change the rate, wouldn't they need him to sign all the closing docs again with the new rate? What would be his recourse, if any, if he were to find out when he gets his first statement that the new loan is at 2.625?
What date was on the "application" they asked him to sign?
I got a copy of the application. The only date on it is the date he wrote next to his signature, and he wrote today's date.
BarDownHockey
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Re: Refinance Mega Thread

Post by BarDownHockey »

Futbolista wrote: Thu Aug 20, 2020 3:00 pm This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
I know this goes against a lot of the advice here, but if you have a jumbo, it might be worth paying $800 to drop half a point. A typical point (0.25% reduction in the interest rate) costs 1% of the loan value. Let’s assume you have a jumbo somewhere just over the conforming limit. On a $550k loan, one point would cost $5,500. A half point (what you’d be paying for here to go from 2.875 to 2.75) would be $2,250. Looking at it this way, $800 is a “cheap” point to pay to get down to 2.75%.

For this to make sense, you’d also need to be someone who doesn’t think rates will get any lower. Because you might be able to get 2.75 (or lower) in the future, for no cost. On the other hand, if this is as low as rates will go, then the $800 is worth it to get the rate as low as you can before they begin to tick up. If / when that will happen is anyone’s guess.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

hbdad wrote: Thu Aug 20, 2020 9:03 pm
anon_investor wrote: Thu Aug 20, 2020 8:59 pm
hbdad wrote: Thu Aug 20, 2020 8:54 pm A weird situation happened to my dad today. He is refinancing at a 2.5 no cost rate. He locked the rate a few weeks ago and actually signed all docs with the notary last weekend. Then today, someone from the refi company called him and said he needed to sign one more document. It was a loan application with a rate of 2.625. My dad noticed it and pointed out to the rep that was incorrect. The rep said when he first applied, the rate quoted was 2.625 and then subsequent to that, the rate lowered to 2.5. So the rep explained, my dad will still get the 2.5, he was free to cross out the 2.625 rate on the application, but that this was just a signature needed on the original application. I told him I would not have signed and I find it highly suspicious. He doesn't think he'll be screwed because all the closing docs he signed said 2.5. The rep told him she expected the loan to fund today or tomorrow. What are your thoughts?
That fails the sniff test. There should be no more signing after the closing...
Agreed. But if they were to change the rate, wouldn't they need him to sign all the closing docs again with the new rate? What would be his recourse, if any, if he were to find out when he gets his first statement that the new loan is at 2.625?
I closed last Friday and Wednesday morning had to sign a corrected doc. It happens. One of the docs I signed was to be available for two weeks for corrective documents. It sounds like they had him sign a 1003. That document is often out of date by the end of a loan as it is generated based on the initial app.

Meanwhile, the Note that gets put as a lien on his property and the Closing Disclosures that outline all the costs and the payment are the key items. If they are incorrect, hard stop until they are fixed.
InvestDoc
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Re: Refinance Mega Thread

Post by InvestDoc »

Bob_Sacamano wrote: Thu Aug 20, 2020 9:21 pm Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Bob_Sacamano
Posts: 63
Joined: Sat Dec 26, 2015 8:47 pm

Re: Refinance Mega Thread

Post by Bob_Sacamano »

InvestDoc wrote: Thu Aug 20, 2020 9:41 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 9:21 pm Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond that I paid standard fees associated with closing according to her. This includes PMI prepayment, points, several HOA fees, title fees, appraisal, etc.

If I refinance again and am able to find a lender with significantly lower closing costs in addition to a lower rate (3.25% perhaps), should I look into it? Since costs were all rolled into the loan, a new loan would basically correct my mistake?

Yep my username is a Seinfeld reference :)
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anon_investor
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Re: Refinance Mega Thread

Post by anon_investor »

Bob_Sacamano wrote: Thu Aug 20, 2020 10:06 pm
InvestDoc wrote: Thu Aug 20, 2020 9:41 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 9:21 pm Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond that I paid standard fees associated with closing according to her. This includes PMI prepayment, points, several HOA fees, title fees, appraisal, etc.

If I refinance again and am able to find a lender with significantly lower closing costs in addition to a lower rate (3.25% perhaps), should I look into it? Since costs were all rolled into the loan, a new loan would basically correct my mistake?

Yep my username is a Seinfeld reference :)
You want to find a refi where the lender credits are large enough to cover all costs (except prepaids and escrow). Your loan balance should not increase. You should pay the prepaids and escrow out of pocket, since the prepaids are interest you would pay anyway and the escrow from your existing loan will get refunded later.
Bob_Sacamano
Posts: 63
Joined: Sat Dec 26, 2015 8:47 pm

Re: Refinance Mega Thread

Post by Bob_Sacamano »

anon_investor wrote: Thu Aug 20, 2020 10:17 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 10:06 pm
InvestDoc wrote: Thu Aug 20, 2020 9:41 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 9:21 pm Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond that I paid standard fees associated with closing according to her. This includes PMI prepayment, points, several HOA fees, title fees, appraisal, etc.

If I refinance again and am able to find a lender with significantly lower closing costs in addition to a lower rate (3.25% perhaps), should I look into it? Since costs were all rolled into the loan, a new loan would basically correct my mistake?

Yep my username is a Seinfeld reference :)
You want to find a refi where the lender credits are large enough to cover all costs (except prepaids and escrow). Your loan balance should not increase. You should pay the prepaids and escrow out of pocket, since the prepaids are interest you would pay anyway and the escrow from your existing loan will get refunded later.
So are the prepaids and escrow partly why my loan balance went up? I guess I'm wondering now if there might have been a mistake or I was misled somehow? And if I should refinance again to correct it.
InvestDoc
Posts: 60
Joined: Sat Jan 13, 2018 12:54 am

Re: Refinance Mega Thread

Post by InvestDoc »

Bob_Sacamano wrote: Thu Aug 20, 2020 10:23 pm
anon_investor wrote: Thu Aug 20, 2020 10:17 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 10:06 pm
InvestDoc wrote: Thu Aug 20, 2020 9:41 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 9:21 pm Original Loan
Oct 2018 closing
$190k home value
10% down payment
$171k loan
5% interest / 30yrs

Refinance Loan
Dec 2019
$200k home value
$176k loan
3.75% interest / 30yrs

I realize it's too late to ask questions but I'd like to know if I made the right choice to refinance at the time and the answer may influence whether I refinance again. My first mistake was not shopping around for a lender. I used the one recommended by my realtor and ran with it. I also did not make enough effort to understand the terms. Lesson learned.

A refinance is essentially a new loan right? So did the increase in home value hurt me and explain why the loan amount went up? I didn't pay anything up front. Closing costs were all worked into the new loan. On the surface I feel like I messed up. I definitely wish I had waited a bit longer considering rates have continued to fall.
This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond that I paid standard fees associated with closing according to her. This includes PMI prepayment, points, several HOA fees, title fees, appraisal, etc.

If I refinance again and am able to find a lender with significantly lower closing costs in addition to a lower rate (3.25% perhaps), should I look into it? Since costs were all rolled into the loan, a new loan would basically correct my mistake?

Yep my username is a Seinfeld reference :)
You want to find a refi where the lender credits are large enough to cover all costs (except prepaids and escrow). Your loan balance should not increase. You should pay the prepaids and escrow out of pocket, since the prepaids are interest you would pay anyway and the escrow from your existing loan will get refunded later.
So are the prepaids and escrow partly why my loan balance went up? I guess I'm wondering now if there might have been a mistake or I was misled somehow? And if I should refinance again to correct it.
I'd pull out your final loan closing statement and see why the cost was so high. I am not sure whether whether you can roll your initial escrow/prepaids into the loan, but if that's allowed it could potentially explain why your loan balance went up by about $8K. Your lender's comment about being "by the book" is a bit concerning though and I wonder if it was meant to mislead you. If you look at the loan estimate there are multiple sections: section A is the lender fees (i.e. points, underwriting, processing application) which are set by the lender and can vary between lenders. Section B is the "Services you cannot shop for" which usually includes the appraisal and again can vary depending on the appraisal company, and Section C is "Services you can shop for" which is the title fees. You can choose to use the lender's title company or you can shop around and find your own title company that might have lower fees.

With regards to wanting to "correct the mistake", I wouldn't look at it that way but rather see if it's possible to get a lower rate for a low cost. If you can find a lower rate with enough lender credits to essentially make it a no-cost loan, I don't see much of a reason not to refinance. However, if you'll be paying another several thousand dollars to refinance, you'll want to make sure that your interest rate drops enough to save you enough money to recoup those costs within a reasonable time frame. You should be able to get low 3's or even <3% as a no cost or very little cost loan based on what others are posting here, so it might make sense to refinance again while rates are at all time lows.
ChiKid24
Posts: 364
Joined: Fri Aug 09, 2019 3:43 pm

Re: Refinance Mega Thread

Post by ChiKid24 »

mattvt15 wrote: Thu Aug 20, 2020 7:41 pm
JSDNJ wrote: Thu Aug 20, 2020 7:30 pm
mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
exactly. To be honest, I totally get the mentality here to not pay anything. But I think that applies more when interest rates were in the 3.5% - 5% range. Now, just roll that money into the loan, as its basically free money. That's my opinion anyways and I'm typically very cheap :-)
It's also free money at 2.75%, but you get flexibility in case rates fall at all from this offer. Another way to think of it is that you are placing a $4,758 bet that you timed the market perfectly and got the bottom. I'm saying I'd rather not place that bet, and I recommend lowering the rate to a nice 2.75% and continue monitoring and redo it again if pricing continues to improve at any point prior to you getting the payback on your out of pocket cost.
Futbolista
Posts: 6
Joined: Sat Aug 15, 2020 11:33 am

Re: Refinance Mega Thread

Post by Futbolista »

BarDownHockey wrote: Thu Aug 20, 2020 9:33 pm
Futbolista wrote: Thu Aug 20, 2020 3:00 pm This thread has been godsend so thanks for all the tips! :beer

I'm shopping a 30 year VA jumbo IRRL. I have one at 2.875 with no costs (A+B+C+E+Credits) and a second offer at 2.75 where my cost would be $800. These are from two different lenders who aren't willing to match each other at the equivalent rates. My break even on the 2.75 is about 19 months. Does anyone have thoughts on whether this is a short enough time horizon to take the lower rate? Part of me thinks that 2.75 for 30 years is amazing and the other wonders whether rates could fall farther with our aging demographics and more federal stimulus.
I know this goes against a lot of the advice here, but if you have a jumbo, it might be worth paying $800 to drop half a point. A typical point (0.25% reduction in the interest rate) costs 1% of the loan value. Let’s assume you have a jumbo somewhere just over the conforming limit. On a $550k loan, one point would cost $5,500. A half point (what you’d be paying for here to go from 2.875 to 2.75) would be $2,250. Looking at it this way, $800 is a “cheap” point to pay to get down to 2.75%.

For this to make sense, you’d also need to be someone who doesn’t think rates will get any lower. Because you might be able to get 2.75 (or lower) in the future, for no cost. On the other hand, if this is as low as rates will go, then the $800 is worth it to get the rate as low as you can before they begin to tick up. If / when that will happen is anyone’s guess.
Thanks for explaining the mechanics on this. I wondered how to determine what was fair for a point and the fact that it was so discounted really threw me off. Any theories on why they would discount the half point so heavily (I'm at 645k so it's even more extreme than your example.)
quizzer25
Posts: 189
Joined: Fri Dec 26, 2014 3:28 am

Re: Refinance Mega Thread

Post by quizzer25 »

BrandonBogle wrote: Thu Aug 20, 2020 7:17 pm
JSDNJ wrote: Thu Aug 20, 2020 7:14 pm I get that, and I get we've been saying this for a while now but how low can these rates go? It's crazy.
I got offered 1.875% on a 15-year today. Not at a price I’d be willing to pay, but it was offered.
Which lender? Do you have to pay points for this rate?
barberakb
Posts: 294
Joined: Fri Apr 21, 2017 11:14 pm

Re: Refinance Mega Thread

Post by barberakb »

He stated "Not at a price I’d be willing to pay" so Im pretty sure that rate is paying pts
mattvt15
Posts: 8
Joined: Mon Jul 27, 2015 3:37 pm

Re: Refinance Mega Thread

Post by mattvt15 »

ChiKid24 wrote: Thu Aug 20, 2020 10:51 pm
mattvt15 wrote: Thu Aug 20, 2020 7:41 pm
JSDNJ wrote: Thu Aug 20, 2020 7:30 pm
mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm

Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
exactly. To be honest, I totally get the mentality here to not pay anything. But I think that applies more when interest rates were in the 3.5% - 5% range. Now, just roll that money into the loan, as its basically free money. That's my opinion anyways and I'm typically very cheap :-)
It's also free money at 2.75%, but you get flexibility in case rates fall at all from this offer. Another way to think of it is that you are placing a $4,758 bet that you timed the market perfectly and got the bottom. I'm saying I'd rather not place that bet, and I recommend lowering the rate to a nice 2.75% and continue monitoring and redo it again if pricing continues to improve at any point prior to you getting the payback on your out of pocket cost.
Wouldn’t the “bet” scenario be:

I pay $4,758 bet,

If I’m right (ie rates stay flat or go up), I “win” a $30k+ reduction in interest of life of loan

If I’m wrong (ie rates go down) within my 19 month break even period, I lose a portion of that $4,758, depending on when. It would be sliding scale from 0-19 months and $4,758 - $0.

If I’m wrong (ie rates go down) after my break even point, then I just refinance and I lost no money and maybe even started saving money.

That’s how I view the situation. I get the flexibility part, but it seems to me that the risk/reward, in my opinion skews to paying points now for a much lower rate.

It feels like trying to time the stock market, except I can lock in 100% guaranteed ROI of $30k interest saved.
Bob_Sacamano
Posts: 63
Joined: Sat Dec 26, 2015 8:47 pm

Re: Refinance Mega Thread

Post by Bob_Sacamano »

InvestDoc wrote: Thu Aug 20, 2020 10:41 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 10:23 pm
anon_investor wrote: Thu Aug 20, 2020 10:17 pm
Bob_Sacamano wrote: Thu Aug 20, 2020 10:06 pm
InvestDoc wrote: Thu Aug 20, 2020 9:41 pm

This has nothing to do with your home value increasing. Your loan amount went up is because you must have financed your closing costs, which must have been fairly high if your loan value is higher than your original loan 2 years ago. Your loan balance would have dropped to about $168,000 after the ~1 year you had your first loan, so your closing costs must have been around $8K if your loan balance was $176K. All that means is that the loan will be more expensive (you'll be paying 3.75% interest on your closing costs for the life of the loan). Whenever you refinance a loan you want to consider how long it will take to break even on the refinance cost (i.e. how much will you pay in lender/title/appraisal fees divided by the monthly savings on your new loan, which will give you the number of months it will take to recoup the costs of refinancing). If you're going to sell your house before the break even period or if it's a super long period (i.e. several years), it doesn't make sense to refinance.

And yes, it will be a new loan, whether you refinance with your current lender or a new lender, it will be listed on your credit report as a new loan and the time on your loan will reset (i.e. you'll have another 30 years to pay if you get a 30 year mortgage).

By the way, great username! I love Seinfeld (unless that's your real name).
Thank you for the response. I had a feeling it was closing costs but I don't understand how they could be that high. The lender explained that everything is basically by the book no matter the lender. Her cut is $1500 for admin/processing (which is high, I regret not shopping around) but beyond that I paid standard fees associated with closing according to her. This includes PMI prepayment, points, several HOA fees, title fees, appraisal, etc.

If I refinance again and am able to find a lender with significantly lower closing costs in addition to a lower rate (3.25% perhaps), should I look into it? Since costs were all rolled into the loan, a new loan would basically correct my mistake?

Yep my username is a Seinfeld reference :)
You want to find a refi where the lender credits are large enough to cover all costs (except prepaids and escrow). Your loan balance should not increase. You should pay the prepaids and escrow out of pocket, since the prepaids are interest you would pay anyway and the escrow from your existing loan will get refunded later.
So are the prepaids and escrow partly why my loan balance went up? I guess I'm wondering now if there might have been a mistake or I was misled somehow? And if I should refinance again to correct it.
I'd pull out your final loan closing statement and see why the cost was so high. I am not sure whether whether you can roll your initial escrow/prepaids into the loan, but if that's allowed it could potentially explain why your loan balance went up by about $8K. Your lender's comment about being "by the book" is a bit concerning though and I wonder if it was meant to mislead you. If you look at the loan estimate there are multiple sections: section A is the lender fees (i.e. points, underwriting, processing application) which are set by the lender and can vary between lenders. Section B is the "Services you cannot shop for" which usually includes the appraisal and again can vary depending on the appraisal company, and Section C is "Services you can shop for" which is the title fees. You can choose to use the lender's title company or you can shop around and find your own title company that might have lower fees.

With regards to wanting to "correct the mistake", I wouldn't look at it that way but rather see if it's possible to get a lower rate for a low cost. If you can find a lower rate with enough lender credits to essentially make it a no-cost loan, I don't see much of a reason not to refinance. However, if you'll be paying another several thousand dollars to refinance, you'll want to make sure that your interest rate drops enough to save you enough money to recoup those costs within a reasonable time frame. You should be able to get low 3's or even <3% as a no cost or very little cost loan based on what others are posting here, so it might make sense to refinance again while rates are at all time lows.
This is from the original loan:
https://imgur.com/MowjZdQ
Last edited by Bob_Sacamano on Fri Aug 21, 2020 8:10 am, edited 1 time in total.
jimmyrules712
Posts: 616
Joined: Thu Jan 06, 2011 11:36 pm

Re: Refinance Mega Thread

Post by jimmyrules712 »

mattvt15 wrote: Thu Aug 20, 2020 7:41 pm
JSDNJ wrote: Thu Aug 20, 2020 7:30 pm
mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm
mattvt15 wrote: Thu Aug 20, 2020 4:23 pm trying to figure out if this is a good quote for refinance. $445k loan (closing costs rolled in) with 85% LTV. A + B + C + E = $4,758. 2.375% 30yr fixed.

Its my 3rd house, so I think I finally know what I want (though of course job changes could always impact that), which means I plan to be here for 15+ years. I was getting 2.75% 30yr fixed at $0 cost, but going from 2.75% to 2.375% saves close to $30k over life of loan. Getting rates down to almost 2% seems like "free" money, so I have no issue rolling the closing costs back in.

I first got this from LenderFi and LoanDepot has beat them by $200 for the A+B+C costs. Thoughts?
Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
exactly. To be honest, I totally get the mentality here to not pay anything. But I think that applies more when interest rates were in the 3.5% - 5% range. Now, just roll that money into the loan, as its basically free money. That's my opinion anyways and I'm typically very cheap :-)
People used this mentality to pay higher fees and points for lower rates at 4% and then 3.75% and then 3.5% all the way down to where we are today. I myself am one of them. Just last year I paid a few thousand in closing costs to get a 3.25% 30 year rate that I was sure would be the last refinance I would ever do and now I'm refinancing again to 2.625% with NO COSTS. The extra money I paid to gt 3.25% last year instead of 3.5% at no cost was a complete waste. For my refinance now I could have gotten 2.5% or 2.375% if I was willing to pay thousands in fees but I'm not making that mistake again because rates could easily continue falling into 1% territory.
itsallaboutme
Posts: 112
Joined: Mon May 22, 2017 2:47 pm

Re: Refinance Mega Thread

Post by itsallaboutme »

My rate was locked at 2.75% they extended the lock twice but this time I noticed the rate is 2.875 at closing

A= $0
B= $40.62
C= $1393
A+B+C= $1433.62
E $165
F $2534.12
G $3177.75
Lender credit $3002

J is $4328.49

It says cash to close is $4796.29 not sure if this is what I bring or is it line J. My escrow account has $2463 I thought I would be credit the same amount back. I have contacted them but no answer yet it's pretty early. This is with Better.com
valleyrock
Posts: 202
Joined: Sun Aug 12, 2018 7:12 am

LenderFi process, etc.

Post by valleyrock »

I need advice.

We applied to LenderFi for a Refi and all went OK. (Refi amount is $274,000.) I asked from the beginning what rates we can get, with various rates, etc.

The LenderFi agent sounds very competent and nice and said we need to first unfreeze our credit reports. Did that, then called, and he ran the credit reports, after which I called again. He then said that we need to sign all the documents first before we can talk rates. (That's a lot of documents, but it's zip zip zip with Docusign, of course. Still...)

He did say that they take care of loan expenses, making it a good idea for us to go from our present rate of 3.5% to even 3.175%, as he had more less said they could probably get for us with zero points. It would save is some money, he said.

Anyway, going to the signing documents, the first document is an estimate, but it has a 30-year rate with 1.65% in points with a rate of 2.65% (established without considering our credit reports, I'm pretty sure). It has about $7,000 worth of costs we have to pay (in addition to the escrow amounts, which are fine). Around $5,000 of the amount we would have to bring to closing is the points; then there's the appraisal, insurance, state fee, etc.)

My calculations come up with a 4.5 year payback for us to recoup the refinancing expenses if we go with the loan as they suggest. The wife (is that DW?) says don't do it because we might be moving in a few years after kids are in college. But I'd like to consider getting more information... we've come this far.. but I'm not too psyched about going applying elsewhere and doing a back and forth competition thing....

So, my questions are:

--Should we really need to sign every document to talk turkey about rates?
--Is it possible that we'd get even better terms than the estimate after we do get to the point of talking rates (excellent credit, etc., etc.)?
--Are we really on the hook for appraisals, etc. when they said they'd take care of the loan expense?s.... (note we only recently refinanced to get the 3.5% and no appraisal was necessary because we bought the house a little more than 2 years ago)....

Many thanks for comments and suggestions.
mattvt15
Posts: 8
Joined: Mon Jul 27, 2015 3:37 pm

Re: Refinance Mega Thread

Post by mattvt15 »

jimmyrules712 wrote: Fri Aug 21, 2020 8:09 am
mattvt15 wrote: Thu Aug 20, 2020 7:41 pm
JSDNJ wrote: Thu Aug 20, 2020 7:30 pm
mattvt15 wrote: Thu Aug 20, 2020 7:27 pm
ChiKid24 wrote: Thu Aug 20, 2020 6:11 pm

Rather than looking at the $30k savings over the life of the loan, how will you feel if rates continue to fall and you can get 2.375% at no cost or maybe even 2.125% at no cost? In that instance you're either sticking to your 2.375% or doing another refinance and eating the $4,758 cost you spent to do this one. What many of us on this thread preach is to take the no cost option to lock in a low rate but also not have any additional cost so you have the ability to do it again if rates continue falling.
Thanks for that perspective. I think I’m okay if that scenario plays out. What if rates go higher and I can’t even get 2.5% for $4,758?

Plus, I feel like we are getting so low with rates that it’s almost free money. $4,758 for 2.375% over 30 years its only $1,722 in interest. Inflation alone more than pays for this.
Right. If rates go up and you don't see that 2.375 again, youll have cost yourself money in the long run by going with the 'no cost' option now.
exactly. To be honest, I totally get the mentality here to not pay anything. But I think that applies more when interest rates were in the 3.5% - 5% range. Now, just roll that money into the loan, as its basically free money. That's my opinion anyways and I'm typically very cheap :-)
People used this mentality to pay higher fees and points for lower rates at 4% and then 3.75% and then 3.5% all the way down to where we are today. I myself am one of them. Just last year I paid a few thousand in closing costs to get a 3.25% 30 year rate that I was sure would be the last refinance I would ever do and now I'm refinancing again to 2.625% with NO COSTS. The extra money I paid to gt 3.25% last year instead of 3.5% at no cost was a complete waste. For my refinance now I could have gotten 2.5% or 2.375% if I was willing to pay thousands in fees but I'm not making that mistake again because rates could easily continue falling into 1% territory.
That’s all well and good because rates have continued to drop. How would you feel about spending money for 3.25% if after you refinanced, they rose back up to 4% and we’re still at 4% today?

Hindsight is 20/20 and this feels like trying to time the market vs taking the best deal available now. It’s like buying Tesla last week for $1,600, you feel like a genius. But very easily that $1,600 could have dropped to $1,000...and it still may.

To me, spending a could thousand at a <2.5% interest rate to get over $400k at that same <2.5% rate is a no brainer. Maybe if people only have $100-2xx,000 for a loan it’s not as big of a deal. But for higher loan values, I see no reason not to snag the best deal, using extremely cheap money.
mattvt15
Posts: 8
Joined: Mon Jul 27, 2015 3:37 pm

Re: LenderFi process, etc.

Post by mattvt15 »

valleyrock wrote: Fri Aug 21, 2020 8:29 am So, my questions are:

--Should we really need to sign every document to talk turkey about rates?
--Is it possible that we'd get even better terms than the estimate after we do get to the point of talking rates (excellent credit, etc., etc.)?
--Are we really on the hook for appraisals, etc. when they said they'd take care of the loan expense?s.... (note we only recently refinanced to get the 3.5% and no appraisal was necessary because we bought the house a little more than 2 years ago)....

Many thanks for comments and suggestions.
There should be no reason to sign anything to get rates. I just used LenderFi and they gave me a LE (Loan Estimate) without signing anything. I did have to fill out their application online, but that was it.

Doubt you'll be able to just talk your way into better rates. You should be shopping other lenders for competitive quotes, then share them with LenderFi, or vice versa to see if they'd match.

Depends. For me, they waived the appraisal, so no payment and no hassle of an appraiser looking at my house. If you need an appraisal, depending on your rate, lender credits may cover it.
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