Just did a no-cost refinance @2.75% 30-yr

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Topic Author
justsomeguy2018
Posts: 1238
Joined: Wed Oct 03, 2018 8:11 pm

Just did a no-cost refinance @2.75% 30-yr

Post by justsomeguy2018 »

Did this via LenderFi. Help me feel like I made the right decision. Just refinanced last year with existing servicer @ 3.5%, so 30-yr no-cost (A+B+C+D) at 2.75% was the right move....right? Is there anything I am missing?
MrJedi
Posts: 434
Joined: Wed May 06, 2020 11:42 am

Re: Just did a no-cost refinance @2.75% 30-yr

Post by MrJedi »

What are you confused about? You will save money on day 1 after funds disbursement. It's a no brainer if you can get lower interest at no true cost. That's why it's mentioned all the time here.
Topic Author
justsomeguy2018
Posts: 1238
Joined: Wed Oct 03, 2018 8:11 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by justsomeguy2018 »

MrJedi wrote: Fri Sep 18, 2020 9:36 pm What are you confused about? You will save money on day 1 after funds disbursement. It's a no brainer if you can get lower interest at no true cost. That's why it's mentioned all the time here.
Lol I don't know. Just wondering if I should have shopped around, waited to see if rates go lower, did I wait too long since rates jumped up the past few days, etc.

As of now all I have done is signed the lock rate, hoping everything else goes smoothly.

Home purchases/refi's stress me out for some reason. Like I am going to overlook some key detail in the signing documents and get screwed. Or have to pay some fee that I didn't foresee.
saagar_is_cool
Posts: 264
Joined: Thu Jan 30, 2014 2:21 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by saagar_is_cool »

justsomeguy2018 wrote: Fri Sep 18, 2020 9:47 pm
MrJedi wrote: Fri Sep 18, 2020 9:36 pm What are you confused about? You will save money on day 1 after funds disbursement. It's a no brainer if you can get lower interest at no true cost. That's why it's mentioned all the time here.
Lol I don't know. Just wondering if I should have shopped around, waited to see if rates go lower, did I wait too long since rates jumped up the past few days, etc.

As of now all I have done is signed the lock rate, hoping everything else goes smoothly.

Home purchases/refi's stress me out for some reason. Like I am going to overlook some key detail in the signing documents and get screwed. Or have to pay some fee that I didn't foresee.
If rates go down, you refinance again at no cost to you. Rinse and repeat. I was doing 2.75% 30 year and got it price matched to 2.5% now and will close in few days. This was also at zero cost and this is my 4th refinance in 2 years :)
Topic Author
justsomeguy2018
Posts: 1238
Joined: Wed Oct 03, 2018 8:11 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by justsomeguy2018 »

saagar_is_cool wrote: Fri Sep 18, 2020 9:52 pm
justsomeguy2018 wrote: Fri Sep 18, 2020 9:47 pm
MrJedi wrote: Fri Sep 18, 2020 9:36 pm What are you confused about? You will save money on day 1 after funds disbursement. It's a no brainer if you can get lower interest at no true cost. That's why it's mentioned all the time here.
Lol I don't know. Just wondering if I should have shopped around, waited to see if rates go lower, did I wait too long since rates jumped up the past few days, etc.

As of now all I have done is signed the lock rate, hoping everything else goes smoothly.

Home purchases/refi's stress me out for some reason. Like I am going to overlook some key detail in the signing documents and get screwed. Or have to pay some fee that I didn't foresee.
If rates go down, you refinance again at no cost to you. Rinse and repeat. I was doing 2.75% 30 year and got it price matched to 2.5% now and will close in few days. This was also at zero cost and this is my 4th refinance in 2 years :)
I had no idea it was that easy. I was told refi's aren't worth it unless you can get around a 1% rate improvement.

It seems to me my only cost is I will have to pay a lump sum $13k payment for escrows that I will have to draw from an account earning 0.55% interest, though of course it will eventually be reimbursed to me from my previous mortgage servicer, so that is what, around $15 in interest lost?
saagar_is_cool
Posts: 264
Joined: Thu Jan 30, 2014 2:21 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by saagar_is_cool »

justsomeguy2018 wrote: Fri Sep 18, 2020 9:56 pm
saagar_is_cool wrote: Fri Sep 18, 2020 9:52 pm
justsomeguy2018 wrote: Fri Sep 18, 2020 9:47 pm
MrJedi wrote: Fri Sep 18, 2020 9:36 pm What are you confused about? You will save money on day 1 after funds disbursement. It's a no brainer if you can get lower interest at no true cost. That's why it's mentioned all the time here.
Lol I don't know. Just wondering if I should have shopped around, waited to see if rates go lower, did I wait too long since rates jumped up the past few days, etc.

As of now all I have done is signed the lock rate, hoping everything else goes smoothly.

Home purchases/refi's stress me out for some reason. Like I am going to overlook some key detail in the signing documents and get screwed. Or have to pay some fee that I didn't foresee.
If rates go down, you refinance again at no cost to you. Rinse and repeat. I was doing 2.75% 30 year and got it price matched to 2.5% now and will close in few days. This was also at zero cost and this is my 4th refinance in 2 years :)
I had no idea it was that easy. I was told refi's aren't worth it unless you can get around a 1% rate improvement.

It seems to me my only cost is I will have to pay a lump sum $13k payment for escrows that I will have to draw from an account earning 0.55% interest, though of course it will eventually be reimbursed to me from my previous mortgage servicer, so that is what, around $15 in interest lost?
Yes, it is pretty easy, if you have good credit score. The 1% rate rule of thumb is if you have to pay the fees like application fee, credit fees, title and reg etc. which will take 1-2 years to breakeven. When you do zero cost, picked up by Lender in lender credits, it is just fronting escrow and if you have the cash to front, then it is a no-brainer.

I bought in 2018 and after initial mortgage, I did 4.5 —> 3.75 —> 3.375 —> 3 —> 2.5 happening now. Although, the first time, for 4.5 to 3.75 one, I had about $2400 in fees and expected to breakeven in 2-3 years.

One downside is resetting the loan to again 30 years from closing, but when you factor in cost savings you come out better and can probably pay faster.
mega317
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by mega317 »

So wait you didn’t do the refi you just have a rate lock? Shop it around
https://www.bogleheads.org/forum/viewtopic.php?t=6212
Topic Author
justsomeguy2018
Posts: 1238
Joined: Wed Oct 03, 2018 8:11 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by justsomeguy2018 »

mega317 wrote: Fri Sep 18, 2020 11:51 pm So wait you didn’t do the refi you just have a rate lock? Shop it around
How do I do that


I signed loan disclosire info
bling
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Joined: Sat Jan 21, 2012 12:49 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by bling »

pretty sure you're well within your rights to walk away at any time. even after you close, by law you have 3 days to undo everything.

you're gonna have some nasty conversations with LF if you do this though.

in my experience, brokers are already very aggressive before you lock, i can't imagine how nasty they will become if you walk away mid-process.
Golf maniac
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Location: Florida

Re: Just did a no-cost refinance @2.75% 30-yr

Post by Golf maniac »

Even though price locked you can still shop. Talk to local banks, credit unions, broker, other online sources. Get their no cost rate, then approach Lenderfi about matching if you find lower rate. Just don’t let anybody do a hard pull on your credit unless you decide to go with a lower rate. Mortgage companies call it “fall out” when borrowers leave before closing. Happens all the time. As rates fall the fall out increases, as rates rise fall out decreases.
bling
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by bling »

Golf maniac wrote: Sat Sep 19, 2020 9:29 am Just don’t let anybody do a hard pull on your credit unless you decide to go with a lower rate.
i thought this was harmless as long as all the pulls are within a couple days of each other since it's evident you're rate shopping.
Familyman2012
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Joined: Wed Jun 03, 2020 3:36 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by Familyman2012 »

Like others have mention. Shop it around. I locked with 3 different lenders at one time. I even signed the initial paperwork with 2 of them. and sent over documents. Multiple credit hard pulls is only counted as 1 if you do it in a certain window time frame. I believe 14 days. But someone can clarify that here. So shop around during that time.

If it’s a true no cost to you. Then you did right. If rates continue to drop. Then refi again.

I went from 4.3—>2.875—>2.5 all a no cost.

I’m in the middle of my 2nd refi.

I completed my 1st in July. Started my second this month.

I wouldn’t hesitate to refi for my 3rd if it’s a no cost. Even if rates drop 0.125. Worth my time.

Head over to the refi thread. Read up and you’ll learn a lot. Lots of helpful people to answer any questions.
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BrandonBogle
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by BrandonBogle »

justsomeguy2018 wrote: Fri Sep 18, 2020 9:28 pm Did this via LenderFi. Help me feel like I made the right decision. Just refinanced last year with existing servicer @ 3.5%, so 30-yr no-cost (A+B+C+D) at 2.75% was the right move....right? Is there anything I am missing?
I would say no-cost is A + B + C (which these three are = D) + E - credits in J. E can be small in some states and massive in others, so that needs to be considered.

Other than that, even if something cheaper comes along, a no-cost improvement is always the right choice.
Golf maniac
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by Golf maniac »

bling wrote: Sat Sep 19, 2020 10:12 am
Golf maniac wrote: Sat Sep 19, 2020 9:29 am Just don’t let anybody do a hard pull on your credit unless you decide to go with a lower rate.
i thought this was harmless as long as all the pulls are within a couple days of each other since it's evident you're rate shopping.
OP is already locked, so allowing other mortgage companies to pull credit will only raise questions right before closing. While pulls within a 14 day window should count as one, there have been cases when multiple pulls show up on the credit report. Not very easy to fix also.
bling
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by bling »

Golf maniac wrote: Sat Sep 19, 2020 3:06 pm
bling wrote: Sat Sep 19, 2020 10:12 am
Golf maniac wrote: Sat Sep 19, 2020 9:29 am Just don’t let anybody do a hard pull on your credit unless you decide to go with a lower rate.
i thought this was harmless as long as all the pulls are within a couple days of each other since it's evident you're rate shopping.
OP is already locked, so allowing other mortgage companies to pull credit will only raise questions right before closing. While pulls within a 14 day window should count as one, there have been cases when multiple pulls show up on the credit report. Not very easy to fix also.
doesn't matter if multiple appear on your credit report, the impact on the score is the same. i refinanced earlier this year, had 3 separate pulls. dropped like 3-5 points and it went back up after 2-3 months.
dandinsac
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by dandinsac »

I refinanced with LenderFI about 6 months ago for 3.25% / 20 years. My original mortgage was 3.75% / 30 years and I was ~7 years in. Now I’m part way through 2.375% / 15 years with LenderFI.

I would recommend going forward with this one and revisiting in 6 months to see if another no cost refinance works. It doesn’t look like interest rates are going up anytime soon.
JJP88
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Joined: Sun Apr 22, 2018 4:41 pm

Re: Just did a no-cost refinance @2.75% 30-yr

Post by JJP88 »

Never heard of a no cost refi, would someone be willing to give me a brief rundown on how to go about this? Brief internet search says that the cost is just added in to the principal amount. Would it benefit me to do this?

Current Rate: 2.875%
Just finished my first year on the mortgage.
Credit Score: 787 (Was 804 before my mortgage)
Original Loan Amount: 120k
Current: $117,884

The only thing I am worried about is last year my house appraised for 150k, but recently Schwab’s Smart Zip says the value is $134,100.
Thanks!
BashDash
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by BashDash »

Are these available in ny?
nolesrule
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Re: Just did a no-cost refinance @2.75% 30-yr

Post by nolesrule »

JJP88 wrote: Sat Sep 19, 2020 5:21 pm Never heard of a no cost refi, would someone be willing to give me a brief rundown on how to go about this? Brief internet search says that the cost is just added in to the principal amount. Would it benefit me to do this?

Current Rate: 2.875%
Just finished my first year on the mortgage.
Credit Score: 787 (Was 804 before my mortgage)
Original Loan Amount: 120k
Current: $117,884

Thanks!
A no cost refi is when the lender gives a credit that covers the closing costs. It's a higher rate than if you do not get a credit. It's the opposite of paying points to get a lower rate.
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