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Penfed Mortgage Rates Very Low again
Old 08-11-2010, 10:21 AM   #1
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Penfed Mortgage Rates Very Low again

In case you don't already have enough spam in your inbox, I'm here to help shill Penfed. Their rates on the 5/5 Adjustable Rate Mortgage are down to 3.75% with no points and no origination fee. You can buy it down further to 3.625% or 3.5% for .25 and 0.625 points, respectively.

In the past many closing costs were paid by Penfed. I don't see that listed on their web site right now specifically, but when you click "apply" the first page discusses "low closing costs". I paid $400-500 for my recent refinance with this product. Call to verify what they are offering. Either way, a pretty good deal.

I have this mortgage right now, and it should work very well for FIRE-seekers who are paying off their mortgage in the next 5 to 10 years. The rate adjusts up to 2% above the initial rate after five years.

You can do the math on it yourself, but this will likely beat many fixed rate mortgages over a 10 year period.

https://www.penfed.org/productsAndRa...tesListing.asp
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Old 08-11-2010, 01:51 PM   #2
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Every time I think I am done refinancing...
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Old 08-11-2010, 02:16 PM   #3
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Every time I think I am done refinancing...
Just think, if this "deflation" thing ever takes shape like the doomsayers here constantly talk about (when they aren't talking about inflation), then we may be refinancing into 1% mortgages in a few years.
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Old 08-11-2010, 02:36 PM   #4
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If it takes shape in a few years I will not have a mortgage to refinance any more.
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Old 08-11-2010, 03:25 PM   #5
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Just think, if this "deflation" thing ever takes shape like the doomsayers here constantly talk about (when they aren't talking about inflation), then we may be refinancing into 1% mortgages in a few years.
Which they will need to pay for the food, energy and health care inflation that far exceeds the stated inflation rate.
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Old 08-11-2010, 11:54 PM   #6
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"Deflation" is a smokescreen thrown up so the Federal Govt can print trillions to inflate its way out of its debt.
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Old 08-12-2010, 12:18 PM   #7
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15 yr fixed is 3.875 as well....but with 1% origination. i think when it hits 3.75 i'll have to pull the trigger and refinance yet again. boo hoo.
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Old 08-12-2010, 12:43 PM   #8
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Every time I think I am done refinancing...
Same here. This would be our ninth between two homes over the last decade.

I wonder if the Fed's recent announcement about buying more bonds is causing mortgage rates to sag even further. Our local low-interest-mortgage bank has been offering a 30-year fixed 4% for two points. This week it's down to 1.75 points. I'm not sure they're appreciative of the lessons their potential future customers are learning from this rate watch, but we're probably going to pull the trigger in September along with a million other mortgage owners.
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Old 08-12-2010, 08:42 PM   #9
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I refi'd about 18 months ago 15 years at 4.5%. My balance is now under 100k so I don't think I'll save too much by any more refi's. Definitely nothing that charges a 1% origination fee.
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Old 08-13-2010, 07:01 AM   #10
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Every time I think I am done refinancing...
I know... Just pulled the trigger on 4.375 no cost for 30 years.
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Old 08-13-2010, 07:47 AM   #11
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I know... Just pulled the trigger on 4.375 no cost for 30 years.
Actually, with a 123k mortgage at 3.875% that I am aggressively paying down, I may really be done refinancing. The marginal benefit is getting pretty skinny. I think that rates would have to go to 3% or less on my 5/5 or it to be worth another refi.
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Old 08-13-2010, 05:21 PM   #12
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I refi'd about 18 months ago 15 years at 4.5%. My balance is now under 100k so I don't think I'll save too much by any more refi's. Definitely nothing that charges a 1% origination fee.
I refi'd to PenFed's 5/5 ARM about 4 months back and they didn't charge a origination fee. They stopped charging the 1% about 6-8 months I think.

Also, if PenFed still owns your loan then they'll only charge you 0.5% to modify the loan to the new rate. I have approx the same size loan at 4% and I'm making extra payments to pay it off in about 5 years. It doesn't make sense in my case since I would only save about 400 in interest over the 5 years when I take into account the 0.5% fee.
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Old 08-16-2010, 06:30 AM   #13
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Originally Posted by brewer12345 View Post
Actually, with a 123k mortgage at 3.875% that I am aggressively paying down, I may really be done refinancing. The marginal benefit is getting pretty skinny. I think that rates would have to go to 3% or less on my 5/5 or it to be worth another refi.
I'd happily give up my great rate for a 123k principal balance. Might consider a limb too
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Old 08-16-2010, 01:13 PM   #14
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Also, if PenFed still owns your loan then they'll only charge you 0.5% to modify the loan to the new rate. I have approx the same size loan at 4% and I'm making extra payments to pay it off in about 5 years. It doesn't make sense in my case since I would only save about 400 in interest over the 5 years when I take into account the 0.5% fee.
I know I should just call in and ask, but does anyone know if this deal is just for the 5/5 ARM or if it also applies to fixed mortgages @ PenFed, too?
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Old 08-16-2010, 11:44 PM   #15
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Good time to buy or re-fi....4.375% 30-year fixed is incredible. There's no way rates will stay this low in the long run.
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Old 08-17-2010, 01:12 PM   #16
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I just called to get on the list for reducing my rate. Currently I'm on a 5/5 at 4.125%, looking to pay the .5% fee to reduce it to 3.75%. My balance is about $300K, so the fee will be $1500, giving me a break even point in 25 months.

Here's how it works:

1- Call their mortgage servicing at 800-585-9055, and tell them you are interested. Then you are on the list using today's rate, and they will call you back. He told me right now it takes about 3 weeks.

2- If the rate goes up, no worries, you get the rate of the day you called. If it goes down, call them again for the lower rate. No additional fee, and you keep your place in "line."

3- When they call back, if you are still interested, they'll send you some paperwork and you send it back. He said no notary would be required.

4- Rate is now lower, and when it adjusts, it is from your new rate. For example, when mine adjusts, the most it can go up is to 5.75%.

I can't say enough good things about PenFed!
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Old 08-17-2010, 08:40 PM   #17
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I haven't looked into this yet, and I'm not (yet) a PenFed member, but this conversation is making me think about refinancing again. I'm curious though. We are retired, with no pension, no real income other than dividends and interest. We have plenty of money as far being able to pay off the mortgage at any time. But I'm wondering if we're going to be able to qualify again, in these new days of actually doing means testing. If I can get a 4.375% loan that's .5% better than what I currently have. About $120/month. It's real money, but I'd hate to have to jump through too many hoops (sorry Sarah ).

Another thing I'd like peoples opinion on. I can balance a checkbook, but I'm not a mathematician or anything. I'm trying to figure out at what point and level a mortgage is worth it to us. I'm carrying one because our house is pretty expensive even now, and having it 100% paid off is leaving a good chunk of money in non-liquid form. Also, having the mortgage deduction has helped keep us down in the 15% tax bracket last year, and probably for the next few years too, which will help with the Roth conversions.

So what I want to do is figure out how much the mortgage is costing us vs. how much it is saving us, and how much mortage is the sweet spot. I know I need to compare how much we get as a deduction vs. how much we are paying in interest, and I think I also need to consider how much we would be paying into the 25% bracket if we didn't have the deduction. I guess I also have to subtract out how much we are making in interest on the amount of the mortgage (negligible). Has anyone ever worked all this out, or (please, God) know of a site or calculator that will walk me through it? I'm keeping the mortgage under $400K so I can stay qualified for the best rates, and wouldn't mind decreasing it to cut down on what I have to come up with every year to pay it. Like I said, I'm looking for the sweet spot. If I can find it, it might make it worthwhile to go through the hassle of refinancing. Any ideas/help?
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Old 08-17-2010, 08:48 PM   #18
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Quote:
Originally Posted by harley View Post

So what I want to do is figure out how much the mortgage is costing us vs. how much it is saving us, and how much mortage is the sweet spot. I know I need to compare how much we get as a deduction vs. how much we are paying in interest, and I think I also need to consider how much we would be paying into the 25% bracket if we didn't have the deduction. I guess I also have to subtract out how much we are making in interest on the amount of the mortgage (negligible). Has anyone ever worked all this out, or (please, God) know of a site or calculator that will walk me through it? I'm keeping the mortgage under $400K so I can stay qualified for the best rates, and wouldn't mind decreasing it to cut down on what I have to come up with every year to pay it. Like I said, I'm looking for the sweet spot. If I can find it, it might make it worthwhile to go through the hassle of refinancing. Any ideas/help?
Harley, do a forum search on "pay off the mortgage early?" and I'm betting you'll find TONS of help.
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Old 08-17-2010, 09:41 PM   #19
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Any online calculators that anyone would recommend for the "To re-fi or not to re-fi" question?
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Old 08-17-2010, 09:56 PM   #20
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A Google search reveals dozens of calculators to determine the interest savings but I don't think I've ever seen one that attempts to also include the tax deduction and potential investment gain aspects. The variables probably make it too complex to easily quantify - which is also the reason there is no consensus on this forum as to the wisdom/folly of early mortgage payoff.
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