Refinance Mega Thread

[LadyGeek]

I merged familythriftmd's thread into the ongoing discussion.

(Thanks to the member who reported the post and provided a link to this thread.)

[DinkinFlicka]

I reached out to my current lender to ask about a no-cost rate drop, and they offered a 0.25% drop with no closing costs and the appraisal waived (credit around $3100). The payment only goes down ~$120 so I don't think it's worth the effort yet.

She mentioned though that escrow doesn't carry over, so I would lose a little bit of interest from the current escrow. After I got off the call, I didn't fully understand that. In a 0-cost refinance where you still have to pay escrow, how does that work? Do you pay at close the new required escrow amount, and then get a check from the old escrow at a later date?

[GoodOmens]

Half point drop with another fed meeting in early Nov and Dec. This thread will be alive soon.

[InvisibleAerobar]

Half point drop with another fed meeting in early Nov and Dec. This thread will be alive soon.

Various lenders that advertise on Zillow and Bankrate have yet to lower rates. Some actually went up now (as in after Fed's announcement) vs last week.

Yield on the 10-yr Treasury hasn't really changed by much.

I'd personally love to see another drop of 0.25% or greater in the next month, but nothing yet. When does the new info get incorporated into rates anyway?

[syngameon]

I will never refi with an online company or any bank that will not service the loan themselves for the entirety of the term. I am not worried about them selling the mortgage, since pretty much every single lender does that now with may be a few exceptions.

We bought our house in May '24 @ 6.625% 20y. The rates were already down by 1% or more before the Fed announcement. I will probably make a deal tomorrow as soon as I see the new rates.

[syngameon]

She mentioned though that escrow doesn't carry over, so I would lose a little bit of interest from the current escrow. After I got off the call, I didn't fully understand that. In a 0-cost refinance where you still have to pay escrow, how does that work? Do you pay at close the new required escrow amount, and then get a check from the old escrow at a later date?

If you do not have mortgage insurance, try to get rid of escrow and make the insurance and tax payments yourself. That way, the bank is not factoring that at all into your calculations.

[simplesimon]

I will never refi with an online company or any bank that will not service the loan themselves for the entirety of the term.

That seems like an expensive restriction as there's no guarantee any bank or company will service the loan themselves for any amount of time let alone 30 years. Why do you feel that way?

[syngameon]

Most respectable credit unions and banks will service the loan for the duration. Over the course of the term, a loan may exchange hands any number of times. Do you really want to be hassled by having to change who you make payments to and follow their rules? For me, it's a big no no.

[simplesimon]

Most respectable credit unions and banks will service the loan for the duration. Over the course of the term, a loan may exchange hands any number of times. Do you really want to be hassled by having to change who you make payments to and follow their rules? For me, it's a big no no.

What rules other than setting up auto-pay have you seen?

For me, an extra 0.25% would have cost me $100 per month and I think at the time credit unions rates compared to Lenderfi were more than a 0.25% difference.

[chazas]

Most respectable credit unions and banks will service the loan for the duration. Over the course of the term, a loan may exchange hands any number of times. Do you really want to be hassled by having to change who you make payments to and follow their rules? For me, it's a big no no.

For conforming loans you’re going to get the best rates usually from someone who is just selling off the servicing rights and selling the loan into a GSE pool. Portfolio lenders are not that common. I refinanced multiple times during the COVID interest rate plunge and ended up with 1.875%. My servicing eventually ended up with Mr. Cooper, which many folks hate. I don’t care, I set up autopay and didn’t opt for an insurance/tax escrow. My wallet was and remains thrilled.

[fetch5482]

Most respectable credit unions and banks will service the loan for the duration. Over the course of the term, a loan may exchange hands any number of times. Do you really want to be hassled by having to change who you make payments to and follow their rules? For me, it's a big no no.

Atleast the 2 times my loan servicer changed, the autopay settings were automatically copied over to the new servicer without needing anything from me. If you pay by check, thats when you have to change the address where the check gets mailed.
I am not sure if this is the norm or not, but even then changing autopay when the servicer changes (which is not super frequent) does not seem like something I would try to avoid at the expense of a higher rate. I understand your preferences may be different.

Furthermore, there is a very high chance I will refinance several times in the next year or so anyway given rates are continuing to go down - so the servicer and autopay settings need to be reconfigured no matter what in my case when that happens.

AFAIK, besides payment, there cannot be any rule changes. They cannot change the payment due date, rate, how much insurance you need to carry etc when loan servicing changes hands. The only other change I am aware of is the fees some lenders may charge for paying off. In CA most lenders seem to charge between $150-250 to payoff the loan during refi, and that amount varies in that range for each servicer.

[Minty]

I reached out to my current lender to ask about a no-cost rate drop, and they offered a 0.25% drop with no closing costs and the appraisal waived (credit around $3100). The payment only goes down ~$120 so I don't think it's worth the effort yet.

Golly, a free drop of $1,440 per year, every year, is not worth it? It is not like a no-fee refi prevents you from refi-ing again in a couple months . . . I myself love the idea of a one-way ratchet down on the interest rate.

[Custom Concern]

Can home loan refinancing and recasting be used in combination to any advantage? For example, I’m a year into a 30-yr at 6.5% and I have about $20K cash that I want to put into principal. Can I refinance to a 15-yr at 5.25% (significantly lower rate than the 30-yr being offered at 6.0%), and then put the 20K into the principal and recast back to a 30-yr with the new lower interest rate?

[tj]

Can home loan refinancing and recasting be used in combination to any advantage? For example, I’m a year into a 30-yr at 6.5% and I have about $20K cash that I want to put into principal. Can I refinance to a 15-yr at 5.25% (significantly lower rate than the 30-yr being offered at 6.0%), and then put the 20K into the principal and recast back to a 30-yr with the new lower interest rate?

.....no.

[DinkinFlicka]

Golly, a free drop of $1,440 per year, every year, is not worth it? It is not like a no-fee refi prevents you from refi-ing again in a couple months . . . I myself love the idea of a one-way ratchet down on the interest rate.

I do as well. My bigger concern is not wanting to burn my spouse out refinancing every time the rate drops 0.25%.

[Custom Concern]

Can home loan refinancing and recasting be used in combination to any advantage? For example, I’m a year into a 30-yr at 6.5% and I have about $20K cash that I want to put into principal. Can I refinance to a 15-yr at 5.25% (significantly lower rate than the 30-yr being offered at 6.0%), and then put the 20K into the principal and recast back to a 30-yr with the new lower interest rate?

.....no.

The amount of dots you’re using suggests this is a dumb question. Care to elaborate?

ETA: I’m reading that recasts restart the existing term length, so one would not be able to “go back” to a longer loan term. That seems to answer my question, but if anyone else has any thoughts feel free to chime in.

[fetch5482]

Golly, a free drop of $1,440 per year, every year, is not worth it? It is not like a no-fee refi prevents you from refi-ing again in a couple months . . . I myself love the idea of a one-way ratchet down on the interest rate.

I do as well. My bigger concern is not wanting to burn my spouse out refinancing every time the rate drops 0.25%.

I don't involve my SO at all in the loan process - I take care of all the comms, documentation etc with the loan officer. SO only has to be available when the notary shows up for final closing.

[simplesimon]

Can home loan refinancing and recasting be used in combination to any advantage? For example, I’m a year into a 30-yr at 6.5% and I have about $20K cash that I want to put into principal. Can I refinance to a 15-yr at 5.25% (significantly lower rate than the 30-yr being offered at 6.0%), and then put the 20K into the principal and recast back to a 30-yr with the new lower interest rate?

.....no.

The amount of dots you’re using suggests this is a dumb question. Care to elaborate?

ETA: I’m reading that recasts restart the existing term length, so one would not be able to “go back” to a longer loan term. That seems to answer my question, but if anyone else has any thoughts feel free to chime in.

Loan term lengths are not interchangable. The price of the loan is lower on a 15-year mortgage than a 30-year mortgage because you're paying it back sooner.

[Nyc10036]

[This thread has been merged into this on-going discussion. Pops1860]

My mom got a mortgage for a house she purchased in Sept 2023.
The interest rate was 7.35%(?).

She got her current mortgage through CMG Home Loans.
Apparently the mortgage was sold to Fannie Mae.

When she got her mortage, CMG had something called Rate Rebound.
They said they will "waive refinance lender fees".

Should she just refinance with them again?

Where should she look to find the lowest cost now when refinancing?
She did a refinance 30 years ago. Alot has changed since then.

[air traffic]

Looking for advice. Wife and I have $750k remaining on a 30 yr loan at 7.625%. We bought the house middle of of 2023 (financed $800k) and have been making extra principle payments averaging $4k/month. Currently have 24 years 5 months left until payoff.

Now that rates are dropping we want to refinance. We can currently lock in a 15 yr 5.375%, but I'm not sure if we should wait for rates to hopefully keep dropping. We are in NY so closing costs are quite high (roughly $17k not including escrow) breakeven for the refinance is 12 months.

Not sure if we should refinance now or wait until mid to late 2025. I know we can always refinance again, but I don't love the idea of paying double closing costs. Would appreciate hearing others opinions as we can't decide on what to do and it is causing me some stress.

[Silk McCue]

I would wait until rates drop further. Waiving refinance lender fees likely doesn’t mean no fees.

Cheers

[sergeant]

Looking for advice. Wife and I have $750k remaining on a 30 yr loan at 7.625%. We bought the house middle of of 2023 (financed $800k) and have been making extra principle payments averaging $4k/month. Currently have 24 years 5 months left until payoff.

Now that rates are dropping we want to refinance. We can currently lock in a 15 yr 5.375%, but I'm not sure if we should wait for rates to hopefully keep dropping. We are in NY so closing costs are quite high (roughly $17k not including escrow) breakeven for the refinance is 12 months.

Not sure if we should refinance now or wait until mid to late 2025. I know we can always refinance again, but I don't love the idea of paying double closing costs. Would appreciate hearing others opinions as we can't decide on what to do and it is causing me some stress.

Most here like to play the fun game of no cost, or even negative cost, refinancing. I do not have a crystal ball but think lower rates are coming over the next couple years. If I were in your situation I would not stress. Take some time, look only at very low or no cost refinancing. This way if/when rates continue to creep down, you can take advantage of the lower rates.

[retireIn2020]

Half point drop with another fed meeting in early Nov and Dec. This thread will be alive soon.

Various lenders that advertise on Zillow and Bankrate have yet to lower rates. Some actually went up now (as in after Fed's announcement) vs last week.

Yield on the 10-yr Treasury hasn't really changed by much.

I'd personally love to see another drop of 0.25% or greater in the next month, but nothing yet. When does the new info get incorporated into rates anyway?

Thats because it was already priced in. The Fed plan for rate drops is announced many months before it actually happens. All you have to do to verify that is listen to the Fed speak, then watch the 10-year yield.

So, going back a few months the Fed expected a .25% drop, with possible additional drops after. The 10-year yield dropped, and mortgage rates since then have dropped from 7% to 6%.

The good news for those looking to refi is that the Fed has just announced an additional drop in the coming months and more drops equaling 1% to be expected over the course of 2025.

Some of that but not likely all of that has been priced in so we should expect to see more 10Y and mortgage rate drops over the coming months.

[gotoparks]

Read the current info on the refinance mega thread.

[simplesimon]

Looking for advice. Wife and I have $750k remaining on a 30 yr loan at 7.625%. We bought the house middle of of 2023 (financed $800k) and have been making extra principle payments averaging $4k/month. Currently have 24 years 5 months left until payoff.

Now that rates are dropping we want to refinance. We can currently lock in a 15 yr 5.375%, but I'm not sure if we should wait for rates to hopefully keep dropping. We are in NY so closing costs are quite high (roughly $17k not including escrow) breakeven for the refinance is 12 months.

Not sure if we should refinance now or wait until mid to late 2025. I know we can always refinance again, but I don't love the idea of paying double closing costs. Would appreciate hearing others opinions as we can't decide on what to do and it is causing me some stress.

Most here like to play the fun game of no cost, or even negative cost, refinancing. I do not have a crystal ball but think lower rates are coming over the next couple years. If I were in your situation I would not stress. Take some time, look only at very low or no cost refinancing. This way if/when rates continue to creep down, you can take advantage of the lower rates.

I think NY is a bit different as it does carry some pretty high closing costs.

I would take the bird in hand. How much extra interest will you be paying while waiting for a potential additional drop?

[air traffic]

Looking for advice. Wife and I have $750k remaining on a 30 yr loan at 7.625%. We bought the house middle of of 2023 (financed $800k) and have been making extra principle payments averaging $4k/month. Currently have 24 years 5 months left until payoff.

Now that rates are dropping we want to refinance. We can currently lock in a 15 yr 5.375%, but I'm not sure if we should wait for rates to hopefully keep dropping. We are in NY so closing costs are quite high (roughly $17k not including escrow) breakeven for the refinance is 12 months.

Not sure if we should refinance now or wait until mid to late 2025. I know we can always refinance again, but I don't love the idea of paying double closing costs. Would appreciate hearing others opinions as we can't decide on what to do and it is causing me some stress.

Most here like to play the fun game of no cost, or even negative cost, refinancing. I do not have a crystal ball but think lower rates are coming over the next couple years. If I were in your situation I would not stress. Take some time, look only at very low or no cost refinancing. This way if/when rates continue to creep down, you can take advantage of the lower rates.

I think NY is a bit different as it does carry some pretty high closing costs.

I would take the bird in hand. How much extra interest will you be paying while waiting for a potential additional drop?

I'm thinking the same thing. We're currently paying close to $4,800/month in mortgage interest. If I refinanced into a 15 year at 5.375% we would be paying closer to $3,400/month in mortgage interest. This spread obviously gets larger over time. We would roll the closing costs into the loan and our payment would increase by about $500/month which isn't a problem for us. If I did the math correctly we should break even in about 13-14 months.

[haranoth]

Those of you who have done zero-cost refi previously, does that usually mean, appraisal and title search cost is also covered by the "zero cost" ?

[Minty]

Those of you who have done zero-cost refi previously, does that usually mean, appraisal and title search cost is also covered by the "zero cost" ?

Yes. But I did three quick refis in a row, nos. 1 and 3 with the same lender.

[fetch5482]

Those of you who have done zero-cost refi previously, does that usually mean, appraisal and title search cost is also covered by the "zero cost" ?

Appraisal, title, government fees, prepaid interest everything is covered by the lender credit amount. Your loan amount will be same or close to the payoff amount without bringing any new cash at close.

[vv19]

Where do you think the 10 year yield settles after the rate cuts are done? It hasn’t gone down by much with the first round of cuts.

[InvisibleAerobar]

Where do you think the 10 year yield settles after the rate cuts are done? It hasn’t gone down by much with the first round of cuts.

I would push back on that framing. Last Oct, the yield on the 10-yr was ~5.0%. in July of this year, it was 4.36%. A few weeks ago, it was 3.65%. 0.7% response is somewhat significant, I would say.

It probably won't dip under 1% (like it did during the pandemic) until something drastically bad occurs.

[vv19]

Where do you think the 10 year yield settles after the rate cuts are done? It hasn’t gone down by much with the first round of cuts.

I would push back on that framing. Last Oct, the yield on the 10-yr was ~5.0%. in July of this year, it was 4.36%. A few weeks ago, it was 3.65%. 0.7% response is somewhat significant, I would say.

It probably won't dip under 1% (like it did during the pandemic) until something drastically bad occurs.

That’s quite fair.

[fetch5482]

Where do you think the 10 year yield settles after the rate cuts are done? It hasn’t gone down by much with the first round of cuts.

I would push back on that framing. Last Oct, the yield on the 10-yr was ~5.0%. in July of this year, it was 4.36%. A few weeks ago, it was 3.65%. 0.7% response is somewhat significant, I would say.

It probably won't dip under 1% (like it did during the pandemic) until something drastically bad occurs.

I agree. You can generally expect mortgage rates to move in anticipation of fed policy changes earlier. More often than not, I expect that fed rate cuts will be "priced in" to the mortgage rates a few weeks ahead of the actual policy announcement; so the post-announcement timeframe may feel like a nothingburger, but in fact it was not.

That said -- I was a bit surprised with the lack of post-announcement move this time given that most of the market was only pricing in a 0.25% cut. The 0.5% cut was a bit of surprise for most investors in my opinion; and I expected the mortgage rates and 10-yr treasury yields to have moved lower due to that.

[tashnewbie]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

[Nyc10036]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

My mom has 7.375%.

Can you tell me who is giving you the 6.5% with no costs?

Thank you.

[tashnewbie]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

My mom has 7.375%.

Can you tell me who is giving you the 6.5% with no costs?

Thank you.

Old National Bank

[InvisibleAerobar]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

My mom has 7.375%.

Can you tell me who is giving you the 6.5% with no costs?

Thank you.

While 30-yr rates have moved up, but assuming SFH/townhouse, LTV < 80%, with outstanding principal of at least $400k, quite a few banks were offering enough lenders' credits to offset Section A, B, and C charges.

Farmers Bank of Kansas City is one such bank and has a national presence. I can't comment on other aspects of its loan process/ loan servicing (it will sell the mortgage note to another servicer).

Actually, right now, its par rate (on $550k outstanding with value of $800k) looks to be 5.625%, with significant lender's credit at 6.0% to offset Sections A - C charges.

With 30-yr mortgages, having a low LTV (say 70% or 75%) is often beneficial.

[Nyc10036]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

My mom has 7.375%.

Can you tell me who is giving you the 6.5% with no costs?

Thank you.

Old National Bank

Thanks!

[Nyc10036]

I bought my first house in May 2024 with a 7.375% rate (30-year conventional).

I've gotten a quote for a refinance at 6.5% with no costs (and ~$500 net lender credit) for 30-yr conventional.

This would reduce my monthly PITI a little more than $200.

Seems like a no-brainer to go ahead and refinance now even though rates may be even lower in a few months.

This is relatively new territory for me so want validation from more experienced folks.

My mom has 7.375%.

Can you tell me who is giving you the 6.5% with no costs?

Thank you.

While 30-yr rates have moved up, but assuming SFH/townhouse, LTV < 80%, with outstanding principal of at least $400k, quite a few banks were offering enough lenders' credits to offset Section A, B, and C charges.

Farmers Bank of Kansas City is one such bank and has a national presence. I can't comment on other aspects of its loan process/ loan servicing (it will sell the mortgage note to another servicer).

Actually, right now, its par rate (on $550k outstanding with value of $800k) looks to be 5.625%, with significant lender's credit at 6.0% to offset Sections A - C charges.

With 30-yr mortgages, having a low LTV (say 70% or 75%) is often beneficial.

Thanks!

[simplesimon]

Is 6.5% competitive? I thought I saw people throwing around sub-6% numbers last week.

[InvisibleAerobar]

Depends on context, but my current mortgage (for house bought in June 2024) is 6.375% on a 30-yr, and it was the par rate.

6.5% thus sound quite uncompetitive from my perspective.

[aboose]

Hello.

My loan is 6.375% and it has been 6 months since I got the loan.

My bank is showing 6% as their "advertised" rate. I'm waiting for 5.5%. But someone referred me to this thread saying its better to just try to do them as rapidly as possible even if its small reductions.

Can anyone educate me on this topic?

[volleyballer]

I'll join the party here...

Bought house last year
Current balance: 330k
Value: 440k as of last year (75% LTV)
Current rate: 7.625% / 30 yr

My current lender is offering 6.25% and waive some of the closing costs. The biggie seems to be no mortgage tax, since I'm staying with the same lender and no new money. I'm in NY (state not city) so that's 1% of $330,000, or $3,300.

I also spoke with a local credit union that's offering 5.625% no origination or points for 30 yr, but I would have to pay mortgage tax since I'm changing lenders.

Is the 5.625% a no brainier at this point, even if it's an extra $3300 in mortgage tax? The difference between 5.625 and 6.25 on a $330,000 loan is $132/mo, so I would break even after 25 months.

I have cash available to pay closing costs out of pocket.

[InvisibleAerobar]

I'll join the party here...

Bought house last year
Current balance: 330k
Value: 440k as of last year (75% LTV)
Current rate: 7.625% / 30 yr

My current lender is offering 6.25% and waive some of the closing costs. The biggie seems to be no mortgage tax, since I'm staying with the same lender and no new money. I'm in NY (state not city) so that's 1% of $330,000, or $3,300.

I also spoke with a local credit union that's offering 5.625% no origination or points for 30 yr, but I would have to pay mortgage tax since I'm changing lenders.

Is the 5.625% a no brainier at this point, even if it's an extra $3300 in mortgage tax? The difference between 5.625 and 6.25 on a $330,000 loan is $132/mo, so I would break even after 25 months.

I have cash available to pay closing costs out of pocket.

While this is correct in terms on monthly payment, the actual difference in initial interest paid is greater. On the 5.625%, you pay total interest of $36,651 for the first two years; on the 6.25%, this is $40,782.

Depending on whether you itemize your taxes and what your bracket is, the break even could be a bit shorter than 25 months (and thereby allowing you to refi sooner if the oppurtunity arises).

[Sandi_k]

I'll join the party here...

Bought house last year
Current balance: 330k
Value: 440k as of last year (75% LTV)
Current rate: 7.625% / 30 yr

My current lender is offering 6.25% and waive some of the closing costs. The biggie seems to be no mortgage tax, since I'm staying with the same lender and no new money. I'm in NY (state not city) so that's 1% of $330,000, or $3,300.

I also spoke with a local credit union that's offering 5.625% no origination or points for 30 yr, but I would have to pay mortgage tax since I'm changing lenders.

Is the 5.625% a no brainier at this point, even if it's an extra $3300 in mortgage tax? The difference between 5.625 and 6.25 on a $330,000 loan is $132/mo, so I would break even after 25 months.

I have cash available to pay closing costs out of pocket.

Ask if they can keep the existing 29 year term - reducing your timeline AND your interest rate is a great thing. Many lenders now allow custom terms, so it would be an advantage to avoid re-setting to a 30 year term if you can.

[fetch5482]

Hello.

My loan is 6.375% and it has been 6 months since I got the loan.

My bank is showing 6% as their "advertised" rate. I'm waiting for 5.5%. But someone referred me to this thread saying its better to just try to do them as rapidly as possible even if its small reductions.

Can anyone educate me on this topic?

This is not a one-size-fits-all answer, but generally speaking if you are able to refinance with zero cost and lower rate, it makes sense to do this. Ofcourse, refinancing can be a tedious process with the documentation needed for underwriter approval and appraisal, so whether it is worth your effort for the lower monthly payment is a call only you can make. I personally refinance when I am able to get a 0.25% or higher difference as long as there is no cost to me (i.e. lender credit covers all the fees and prepaids). In the bay area (where I live), the homes are expensive enough that even a 0.25% difference results in >$250 per month lower payment; and I find it worth my time to go through the refi process at that point.

[InvisibleAerobar]

Hello.

My loan is 6.375% and it has been 6 months since I got the loan.

My bank is showing 6% as their "advertised" rate. I'm waiting for 5.5%. But someone referred me to this thread saying its better to just try to do them as rapidly as possible even if its small reductions.

Can anyone educate me on this topic?

Generally the case, assuming there is enough lender's credit to cover costs listed in Sections A)-C) and the reduction in rate is significant (my threshold is 0.5% drop compared to rate on current mortgage, yours may be different depending on personal preference). Note that when there is that much credit to cover those costs (usually $2,500-$3,250), it means that your interest rate is higher than the par rate* by probably at least 0.25%.

But the upside to this approach is you are in the clear on day 1 and are free to refi again when the next threshold is triggered.

So if I were in your shoes, i'd need the prevailing par rate to drop to 5.625%, then find a lender who offers enough credit to cover Sections A)-C) charges at the lowest interest rate upcharge. Say I find a lender that offers 5.875% with $4k in credit but comes with high origination charges (Section A) and high appraisal and credit check charges (for Sections A) and B) respectively), I'd be looking at a few hundred in overall credits. Note that I'm not including prepaid interest (part of Section F) charge) and other charges in this calculation, as one has to pay interest regardless.

Unfortunately, while 5.875% with significant lender's credit was available two weeks ago, it seems that the rate required to get this much credit has risen to 6.125% (up 0.125% from even earlier this week). It's worthwhile to keep an eye on the 10-yr treasury yield if one is thinking of refi, as that's the rate that largely shape rates on a 30-yr mortgage, and the yield moves even before the Fed actually lowers/raises the Fed Fund Rate.

*Note that while nominal rates are given in increments of 0.125%, the actual rate at par to the lender may be between two nominal rates. So for a true par rate of say 5.70%, it'll be listed at 5.75% with a few hundred in lender's credit. Alternatively, if true par rate is 5.65%, it'll be listed at 5.625% with a few hundred in points.

[fetch5482]

It's worthwhile to keep an eye on the 10-yr treasury yield if one is thinking of refi

Curious how you track this. I couldn't find it in Yahoo finance, only CNBC and sites whose app I don't use for monitoring tickets.

[Auream]

It's worthwhile to keep an eye on the 10-yr treasury yield if one is thinking of refi

Curious how you track this. I couldn't find it in Yahoo finance, only CNBC and sites whose app I don't use for monitoring tickets.

https://finance.yahoo.com/quote/^TNX/

[InvisibleAerobar]

It's worthwhile to keep an eye on the 10-yr treasury yield if one is thinking of refi

Curious how you track this. I couldn't find it in Yahoo finance, only CNBC and sites whose app I don't use for monitoring tickets.

https://finance.yahoo.com/quote/^TNX/

Yep, that's a good source. Some of the other sources take too long to load.

The St. Louis Fed also has a chart, but it's not as up-to-date (latest entry available as of ~2PM ET on 3 Oct. 2024 is the data from 1 Oct. 2024).