Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Yet another mortgate rate question...
Old 11-26-2008, 11:24 AM   #1
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
Yet another mortgate rate question...

Heard on the radio about the big drop in rates yesterday. So I checked. My credit union is offering 5.375 on a 30 year. Have not checked USAA yet (thanks to work filtering their website!).

This rate is pretty dang low. I'm at 6.25 now. Maybe I'll run some numbers.

Good time to refinance? I need to free up cash for other purposes, otherwise I'd work on shortening the term (15 was 6.125, as was 10 year)...
__________________

__________________
Bimmerbill is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-26-2008, 11:36 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Agree that the rate is low - what kind of fees are associated with the refinance? Might keep an eye on Pentagon Federal, most favoritist bank ever for me. They are at 5.5% for a 30 year fixed right now...
https://www.penfed.org/productsAndRa...gageCenter.asp
__________________

__________________
calmloki is offline   Reply With Quote
Old 11-26-2008, 11:51 AM   #3
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
About $2K in fees. Doesn't look like I'd save that much on a $120K balance. May be good to roll my $37K HELOC into it and get a good fixed rate tho.
__________________
Bimmerbill is offline   Reply With Quote
Old 11-26-2008, 11:54 AM   #4
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,758
Speaking of which! I was in WAMU yesterday doing some condominium association business, and they indicated they would be willing to drop .5% from your current rate (with lower closing costs) for existing customers.

I didn't pursue it, but food for thought for those with WAMU mortgages.

-- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 11-26-2008, 11:55 AM   #5
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
I'm holding out for a while yet. I think there will be a opening of floodgates and the rate will drop precipitously at some point. Of course I can't be sure, but you and I are both at rates where we're not leaving too much money on the table as it is, so there's much more upside potential to waiting than downside, IMHO.
__________________
laurence is offline   Reply With Quote
Old 11-26-2008, 12:02 PM   #6
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 1,758
Absolutely agree. I was encouraged to get the paperwork going now (intimating -- before the flood). I also think there may be more leverage available to get to a lower rate than .5% when the competition heats up -- especially for those with a FICO score of 700 or so.

-- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Old 11-26-2008, 12:31 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Quote:
Originally Posted by Bimmerbill View Post
About $2K in fees. Doesn't look like I'd save that much on a $120K balance. May be good to roll my $37K HELOC into it and get a good fixed rate tho.
So a .75% savings is worth about $900 first year if you did a Penfed no fee 5.5% loan. They are very easy loans to do, or mine was last year...
$900. easy. just sayin.
__________________
calmloki is offline   Reply With Quote
Old 11-26-2008, 01:24 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
If you dig around on the web, there is a guy called the mortgage professor who has quite sophisticated calculators that will help you figure out if it is worth it to refi. He is/was a Wharton finance professor, so I think the stuff is good.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 11-26-2008, 02:35 PM   #9
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
If I can drop my P&I payment by 8% and keep same repayment period, then refinancing gets my attention.

8% drop means I save 1 mortgage payment per year.
Keeping same repayment date accounts for the principal I have already paid down.

I have a 5.75% mortgage (started in 2006), 30 yr fixed. Any refinance for me would have to have a 2036 repayment date and still save me 8% on the payment.

I think rates will stay low through May of 2009. There is a chance the economy will have started improving around then... so rates would head upward soon after that.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 11-26-2008, 02:56 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Youse guys are higher rollers than i. If i have a chance to save a couple hundred bucks a year for very little effort i take it - it's enough to make me change or get new credit cards. $900 gets my attention. Shoot, it's way more than we've made in the market this year....(wry emoticon)
__________________
calmloki is offline   Reply With Quote
Old 11-26-2008, 03:02 PM   #11
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by calmloki View Post
Youse guys are higher rollers than i. If i have a chance to save a couple hundred bucks a year for very little effort i take it - it's enough to make me change or get new credit cards. $900 gets my attention. Shoot, it's way more than we've made in the market this year....(wry emoticon)
The cost to get the $900 and the impact it has on the budget are what I look at.

My last refi cost me around $2500 or $3000 (including points). The points dropped me from 6% to 5.75% in 2006.

If the refi saved me $900 that year, but cost me $3000, it would take 3 years to recoup just the closing costs. I prefer to break even sooner- so I want the refi to take my payment down lower before I consider pulling the trigger. For example my calculations show I need to see a 5.25% rate before a refi makes sense (on my current 30 yr fixed 5.75%). A 5.5% rate would lower my payment and save me around $1500/year, but it would cost me to close on the loan, and because of mortgage size, that cost is around 2k every place I look.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 11-26-2008, 04:11 PM   #12
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
I'll be darned. NFCU has a 5.25% 30-year fixed loan for 1.875 points.

We've been tracking their mortgage rates for over four years and this is the first time a refinancing would have a decent payback. Considering the lost interest on the points & closing costs, we'd lower our payments by 4.5% and reset our 26 remaining years back to 30. But the effort would pay itself off in "just" nine years and give us a mortgage until I'm 78 years old.

Looks like USAA & PenFed are slightly higher.

NFCU's deal is more compelling if the points or the interest rate drop. We'll have to keep an eye on it. Happy Thanksgiving!
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-26-2008, 05:07 PM   #13
Full time employment: Posting here.
Darryl's Avatar
 
Join Date: Mar 2007
Posts: 577
Nords I picked up Penfed last February at 4.625 15 year with no points you must have walked away from your computer during the six hours the rate was that low.
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
Darryl is offline   Reply With Quote
Old 11-26-2008, 05:21 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 5,459
Quote:
Originally Posted by jIMOh View Post
The cost to get the $900 and the impact it has on the budget are what I look at.

My last refi cost me around $2500 or $3000 (including points). The points dropped me from 6% to 5.75% in 2006.

If the refi saved me $900 that year, but cost me $3000, it would take 3 years to recoup just the closing costs. I prefer to break even sooner- so I want the refi to take my payment down lower before I consider pulling the trigger. For example my calculations show I need to see a 5.25% rate before a refi makes sense (on my current 30 yr fixed 5.75%). A 5.5% rate would lower my payment and save me around $1500/year, but it would cost me to close on the loan, and because of mortgage size, that cost is around 2k every place I look.
fer sure fees make a big difference. That's why i liked the Penfed loan - no fees. right now this is what i see at their site - different than my earlier post, worth watching them.
30 Yr Fixed RateAPR

Points 5.750%


Looks like Bimmerbill would only save $600 at this time, rather than the $900 i thought i saw this morning.
5.750%




0.000
__________________
calmloki is offline   Reply With Quote
Old 11-26-2008, 05:27 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,946
Quote:
Originally Posted by brewer12345 View Post
If you dig around on the web, there is a guy called the mortgage professor who has quite sophisticated calculators that will help you figure out if it is worth it to refi. He is/was a Wharton finance professor, so I think the stuff is good.
Jack Guttentag................
http://finance.yahoo.com/expert/article/mortgage/124665

Mortgage Professor Website.......
http://www.mtgprofessor.com/
__________________
jazz4cash is offline   Reply With Quote
Old 11-26-2008, 07:20 PM   #16
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by Darryl View Post
Nords I picked up Penfed last February at 4.625 15 year with no points you must have walked away from your computer during the six hours the rate was that low.
No way, that would actually raise my monthly payments. We're four years into a 30-year fixed at 5.375%. Besides it's a bit chancy to arb the investment of a 15-year mortgage, especially when the market is high. Doing it now might actually pay off.

The objective here is to get the lowest payments stretched out over the longest time. 40-year mortgages are still too new to offer much competition and they don't significantly lower the payment either.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-26-2008, 07:23 PM   #17
Full time employment: Posting here.
Darryl's Avatar
 
Join Date: Mar 2007
Posts: 577
Nords, a millisecond before I hit the enter key I knew what your response to 15 yr would be but I had too much momentum to stop my finger.
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
Darryl is offline   Reply With Quote
Old 11-27-2008, 11:11 AM   #18
Recycles dryer sheets
SteveL's Avatar
 
Join Date: Aug 2005
Posts: 380
Getting an appraisal might be the big problem in any refi today. I have a neighbor who bought a couple of years ago via an ARM, and now it looks like his house won't appraise for enough to cover his original first. Our neighborhood has 170 houses, mostly different, but only five for sale. No house has sold for more than a year. Hard to get a good est. under these conditions.
__________________
SteveL is offline   Reply With Quote
Old 11-27-2008, 12:25 PM   #19
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Bimmerbill View Post
Heard on the radio about the big drop in rates yesterday. So I checked. My credit union is offering 5.375 on a 30 year. Have not checked USAA yet (thanks to work filtering their website!).
Why on earth would an employer place a filter on USAA?

Anyway, my CU recently dropped their no-points 30-year FRM from 6.25% to 5.375%.

Hopefully mortgage rates this low will convince some people on the sidelines waiting for a housing bottom to get in now while rates are very low...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 11-28-2008, 08:04 PM   #20
Dryer sheet aficionado
 
Join Date: Feb 2008
Posts: 29
Quote:
Originally Posted by Darryl View Post
Nords I picked up Penfed last February at 4.625 15 year with no points you must have walked away from your computer during the six hours the rate was that low.
Darryl,

We locked the day before rates hit 4.625, and wound up with 4.875. Oh well, can't complain too much.

--nickel
__________________

__________________
nickel is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Another heart rate question boutros Health and Early Retirement 11 05-20-2008 11:48 AM
Tax question regard 2008 capital gain rate teejayevans FIRE and Money 3 12-10-2007 10:01 PM
simple tax rate question bobbee25 FIRE and Money 2 07-16-2007 04:38 PM
Another safe withdrawal rate question arandomwalk07 FIRE and Money 52 04-04-2007 10:46 AM
A simple withdrawal rate question Roger_R FIRE and Money 7 03-07-2007 04:30 AM

 

 
All times are GMT -6. The time now is 11:04 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.