Mortgage Rates | Get the Best Current Mortgage Rates in Seconds
I doubt you'll hear this from the doom and gloom news media.
How sweet it is!
I doubt you'll hear this from the doom and gloom news media.
How sweet it is!
Unfortunately it's not quite here yet. I just did an online quote. For a 300k loan at 4.25%, it wants $9,455 for lender fees.Mortgage Rates | Get the Best Current Mortgage Rates in Seconds
I doubt you'll hear this from the doom and gloom news media.
How sweet it is!
Yes, the real question is what is the APR?Unfortunately it's not quite here yet. I just did an online quote. For a 300k loan at 4.25%, it wants $9,455 for lender fees.
Yes, the real question is what is the APR?
Yes, the real question is what is the APR?
The APR is not a good metric because it spreads the points and fees over the life of the loan, i.e. 30 years while the typical life of the loan is less than 7 years. If you spread the points and fees over 7 years or the expected life of the loan, the APR would be much higher if the points and fees are high.If you click the column that says "APR-Calculate", it will include the APR's for all the listed rates. The APR for the 4.25 rate loan is around 4.5 (still pretty good!), and the lowest cost loan is 5.375 (apr =5.379) with fees of only $162.00, but it's a sneaky looking chart because they don't detail the points vs. the other lender fees.
Yeah, I answered that way without going to the web site. I was just pointing out the importance of figuring an APR since the OP just shouted about the rate. Once I went there I saw that feature.If you click the column that says "APR-Calculate", it will include the APR's for all the listed rates. The APR for the 4.25 rate loan is around 4.5 (still pretty good!), and the lowest cost loan is 5.375 (apr =5.379) with fees of only $162.00, but it's a sneaky looking chart because they don't detail the points vs. the other lender fees.
Very good point that people need to take into account. You can talk yourself into it by figuring a 30 yr duration but if you sell in 5 years the math is quite different.The APR is not a good metric because it spreads the points and fees over the life of the loan, i.e. 30 years while the typical life of the loan is less than 7 years. If you spread the points and fees over 7 years or the expected life of the loan, the APR would be much higher if the points and fees are high.
Very good point that people need to take into account. You can talk yourself into it by figuring a 30 yr duration but if you sell in 5 years the math is quite different.
It's also why it's difficult to assess a refil without knowing the specific individual's circumstances.
On the other hand it depends on how you define your pay back. Most people will refi into the same term loan they had and take advantage of a lower payment. Then they calculate how long it will take to recoup costs based on that lower payment.I agree. IMO the best way to approach re-financing is to use an online calculator to determine if the package makes sense financially. If your calculated pay back (in months) is less than the time-frame that you are likely to sell the house - you will be ahead. This is the best calculator that I have found:
Mortgage Refinance Calculator: Refinancing One FRM Into Another FRM
I am in the process of re-financing and my calculated pay-back is in 12 months. My loan provider quoted the same pay-back period so either the numbers are accurate or they use the same calculator?!
On the other hand it depends on how you define your pay back. Most people will refi into the same term loan they had and take advantage of a lower payment. Then they calculate how long it will take to recoup costs based on that lower payment.