Is anyone doing a refi?

[MojoMan]

My mortgage company called me.

 

0.825% less on a 15 year at basically no cost.

[rajncajn]

Would if I could...

[SLAYER]

 

You been doing some, it is spelled reefer.

[WashingtonD]

In process of my second re-fi in about 12 months, shaved another full percentage point off the rate, ultimately it was just stupid not to do it based on the money we'd save.

 

It's a hassle, but at least since we had just done it we already had all the paperwork ready to go, so it only took an hour to get everything organized and over to the broker.

[I Like Soup]

My mortgage company called me.

 

0.825% less on a 15 year at basically no cost.

Do it.

[Big Country]

Yup, should be closing in the next 10 days or so, shaving 8 years and 1.125% off the loan. Throwing some extra cash in to get it to the conforming level, but at the end of the day, payments will be about $125 less and I'll save about $200K over the life of the loan.

[lennykravitz2004]

Re-financed last October, just over 1 year in on a 30 year. Dropped 1 point. Along with changing to new auto/home insurance, saved over $150/month - and yes, same coverage plus a little more in a couple of spots.

[i_am_the_swammi]

I still get a little baffled when it comes to analyzing the value of a refi.

 

I have 17 years left on a 25-year loan. Rate is 5.75. I have been inundated with offers to refi, and the savings per month if I did a 30-year would be about $400 per month to my cash flow.

 

My question is, if I essentially start all over with a 30-year, won't I be paying mostly interest for the next 10 years? barely any principal will come off. Right now, my payments are about 60/40 interest to principal. If I start all over, that ratio would likley be 95/5.

 

Seems like, even though my rate is high at 5.75, that I have already paid the cost of that interest.

[Puddy]

I still get a little baffled when it comes to analyzing the value of a refi.

 

I have 17 years left on a 25-year loan. Rate is 5.75. I have been inundated with offers to refi, and the savings per month if I did a 30-year would be about $400 per month to my cash flow.

 

My question is, if I essentially start all over with a 30-year, won't I be paying mostly interest for the next 10 years? barely any principal will come off. Right now, my payments are about 60/40 interest to principal. If I start all over, that ratio would likley be 95/5.

 

Seems like, even though my rate is high at 5.75, that I have already paid the cost of that interest.

That's sort of right. But that assumes you pay the new minimum payment. Don't look for cash flow savings and pay the same amount you do now and you'll pay it off in less time due to the lower rate. Still a good deal.

 

 

Oh and my house has decreased in value about 65 percent or so in 4 years. So no refi for me.

[Big John]

Oh and my house has decreased in value about 65 percent or so in 4 years. So no refi for me.

yep

[Footballjoe]

That's sort of right. But that assumes you pay the new minimum payment. Don't look for cash flow savings and pay the same amount you do now and you'll pay it off in less time due to the lower rate. Still a good deal.

 

 

Oh and my house has decreased in value about 65 percent or so in 4 years. So no refi for me.

I did a refi just before the bottom dropped out and got a 4%. I think I am good excpept that my house is worth far less than it use to be. I am in the club.

[Ursa Majoris]

Been tossing about the idea of going down to a 3.8% 15 year from a 5% 15 year but I only have 6 years to go to pay it all off so I'm not sure it's worth doing even if I made the same payment I do now. I would definitely want to pay it off in the same 6 year timeframe. The vast majority of my payment is coming off principal.

[Big Country]

Been tossing about the idea of going down to a 3.8% 15 year from a 5% 15 year but I only have 6 years to go to pay it all off so I'm not sure it's worth doing even if I made the same payment I do now. I would definitely want to pay it off in the same 6 year timeframe. The vast majority of my payment is coming off principal.

 

 

I would strongly consider a 7/1 ARM if I were you. Pay on a 7 year payoff schedule, not the payment schedule of the 7-year AR<m which is a 30 year amortization schedule, and you can pay off the house in the same time frame at a much lower interest rate.

 

This link takes you to no cost options from an online mortgage broker. Financial site I peruse reccomends them, as does the Mortgage Professor - google the site

 

 

I plugged in MN, 75% LTV and assumed good credit with a 700 score and they come up with a 15-year fixed at 3.375%, no lender costs and estimated 3rd party fees of about $800.

 

However, I think you can find 7/1 ARM rates a bit lower, but one thing going with the 15 year fixed does is lock in a low rate and give you flexibility to pay off faster if you can afford it (so as to stick to your 6-year schedule), or to cut back to the minimum payment if cash flow needs to be freed.

 

The Mortgage Professor website has a bunch of calculators to help you compare costs/savings of refi options.

[Big Country]

I still get a little baffled when it comes to analyzing the value of a refi.

 

I have 17 years left on a 25-year loan. Rate is 5.75. I have been inundated with offers to refi, and the savings per month if I did a 30-year would be about $400 per month to my cash flow.

 

My question is, if I essentially start all over with a 30-year, won't I be paying mostly interest for the next 10 years? barely any principal will come off. Right now, my payments are about 60/40 interest to principal. If I start all over, that ratio would likley be 95/5.

 

Seems like, even though my rate is high at 5.75, that I have already paid the cost of that interest.

 

 

Consider going to a 15 year, or, as Puddy stated, go to a 30-year but keep your current payment amount to pay it off faster. But you could go to a 15 year and save almost 2.5% in interest, or look at the 20 year options as well. As I said, I was able to get 3.875% on a 20 year, which is almost a 2% savings for you and would only add 3 years to your term if you were to make the minimum payment only.

 

I built myself a simple spreadsheet to anlayze the different offers out there and to calculate what I could save over the life of the loan vs. my current mortgage. Simple method was to take my current payment and multiply it by how many payments I had left (everything I have already paid is already paid, so I can;t save on that). That gives me the cost of my current mortgage. Then I calculated the total costs of payments on the new mortgage and added in all of my closing costs, fees, etc. to that cost to come up with total cost of refi options. Subtract current cost from new cost to determine savings. Now, if you plan to pay on an accelerated schedule, same principle applies, it's just you have to figure out how many payments at your increased level would pay off the mortgage and use that as your new cost.

[i_am_the_swammi]

Consider going to a 15 year, or, as Puddy stated, go to a 30-year but keep your current payment amount to pay it off faster. But you could go to a 15 year and save almost 2.5% in interest, or look at the 20 year options as well. As I said, I was able to get 3.875% on a 20 year, which is almost a 2% savings for you and would only add 3 years to your term if you were to make the minimum payment only.

 

I built myself a simple spreadsheet to anlayze the different offers out there and to calculate what I could save over the life of the loan vs. my current mortgage. Simple method was to take my current payment and multiply it by how many payments I had left (everything I have already paid is already paid, so I can;t save on that). That gives me the cost of my current mortgage. Then I calculated the total costs of payments on the new mortgage and added in all of my closing costs, fees, etc. to that cost to come up with total cost of refi options. Subtract current cost from new cost to determine savings. Now, if you plan to pay on an accelerated schedule, same principle applies, it's just you have to figure out how many payments at your increased level would pay off the mortgage and use that as your new cost.

 

 

if you'd care to share that spreadsheet, I'd love to play around with my options...

[whomper]

Would if I could...

 

 

yep

[The Irish Doggy]

My mortgage company called me.

 

0.825% less on a 15 year at basically no cost.

 

My initial thought is that if they are calling you with that offer, you can probably do even better if you shopped around a bit. Even if not, jump on that deal. Cash in your pocket is always better than cash in theirs no matter how you choose to spend it.

[Big Country]

 

if you'd care to share that spreadsheet, I'd love to play around with my options...

 

 

PM me the e-mail you want me to send it to

[JoJoTheWebToedBoy]

Should be wrapping mine up by the end of the month. Went from 6% to 4.25%.

[Ursa Majoris]

I would strongly consider a 7/1 ARM if I were you. Pay on a 7 year payoff schedule, not the payment schedule of the 7-year AR<m which is a 30 year amortization schedule, and you can pay off the house in the same time frame at a much lower interest rate.

 

This link takes you to no cost options from an online mortgage broker. Financial site I peruse reccomends them, as does the Mortgage Professor - google the site

 

 

I plugged in MN, 75% LTV and assumed good credit with a 700 score and they come up with a 15-year fixed at 3.375%, no lender costs and estimated 3rd party fees of about $800.

 

However, I think you can find 7/1 ARM rates a bit lower, but one thing going with the 15 year fixed does is lock in a low rate and give you flexibility to pay off faster if you can afford it (so as to stick to your 6-year schedule), or to cut back to the minimum payment if cash flow needs to be freed.

 

The Mortgage Professor website has a bunch of calculators to help you compare costs/savings of refi options.

Dang, I hadn't even thought of that. An ARM is usually considered risky because of the reset but I wouldn't have to worry about that at all.

 

I'll follow up on this - thanks!

[rbmcdonald]

That's sort of right. But that assumes you pay the new minimum payment. Don't look for cash flow savings and pay the same amount you do now and you'll pay it off in less time due to the lower rate. Still a good deal.

 

 

Oh and my house has decreased in value about 65 percent or so in 4 years. So no refi for me.

 

Our mortgage is with a Credit Union. I called them up and told them I was getting ready to start shopping around to refi. They told me that they offered a 1 time only rate adjustment for $500. It was not a refi, they just adjusted the rate on the remaining balance of the current mortgage. They did not offer a market rate, but the rate they offered was much closer to the market rate at the time, then it was to the current rate on the loan. The payback was less than a year. Since it was not a refi, there was no appraisal. Note, we did put 20% down originally. We did this because we expect to sell in the next couple of years. I mention this for two reasons. 1) Might be a viable approach for anyone that is upside down on their mortgage, but wants to try and take advantage of current low rates. 2) I always deal with a credit union for my loans, if possible.

[Jackass]

Dang, I hadn't even thought of that. An ARM is usually considered risky because of the reset but I wouldn't have to worry about that at all.

 

I'll follow up on this - thanks!

 

i know nothing about ARM's, but there's also a 10 yr fixed option. rate will be prob 1/8 of a % below the 15.

[Big Country]

i know nothing about ARM's, but there's also a 10 yr fixed option. rate will be prob 1/8 of a % below the 15.

 

I have heard that people are getting as low as 3.125% on 10-year fixed.

 

Of course, as noted above, one possible concern is the higher required payment. going with a longer term loan, but paying above the minimum at a faster schedule (ie getting a 15 year but paying enough to have it paid off in 10 years) gives you some flexibility in case of unexpected expenses hitting, etc.