Any good Refi deals going on?

[Bimmerbill]

My mortgage is at 4.875 and I think I can refi to 4.0. My primary bank is USAA, but their refi products seem to be getting hammered in recent reviews, so unsure if I want to take my chances.

Oddly enough, my credit union has higher rates than USAA, so they are not an option.

Has anyone refinanced lately and had a good, quick, low cost experience?

Thanks,
BB

 

[brewer12345]

Have you looked at Navy Fed? Have not been through the process with them, but they are offering to eat closing costs on a 30 year fixed.

 

[Bimmerbill]

No, but I will. PenFed has some specials, but on ARMs.

 

[brewer12345]

I chose to go with Pen Fed's 5/5 ARM, personally. They are "leisurely" in their process, but who cares with a refi. The rate can only change 2 points at the adjustment and then it is fixed for another 5 years. I decided that I could live with that in return for a lower rate, especially as I intend to aggressively amortize the loan anyway. YMMV.

 

[samclem]

My mortgage is at 4.875 and I think I can refi to 4.0. My primary bank is USAA, but their refi products seem to be getting hammered in recent reviews, so unsure if I want to take my chances.

Oddly enough, my credit union has higher rates than USAA, so they are not an option.

Has anyone refinanced lately and had a good, quick, low cost experience?

Thanks,
BB

I've got a refi going with USAA right now. It's 90 days from when you lock things in until the loan is finalized. Frankly, I only shopped it around a little bit--like you, I found USAA beat my local CRs for the same product. I went with a 15 yr fixed, 3.96 APR with zero points. My previous 15 year loan(s) had 8 more years to run. I don't know if I'll let this new loan go 15 years, but my payments are several hundred dollars less per month. We might decide to just keep paying our old monthly amount and get it paid off in 6 years instead of 8 as before. When inflation goes to 7% in a few years, I'll be kicking myself for not getting a 30 year fixed and making the minimum payments with deflated dollars.

 

[harley]

I've got a refi going with USAA right now. It's 90 days from when you lock things in until the loan is finalized. Frankly, I only shopped it around a little bit--like you, I found USAA beat my local CRs for the same product. I went with a 15 yr fixed, 3.96 APR with zero points. My previous 15 year loan(s) had 8 more years to run. I don't know if I'll let this new loan go 15 years, but my payments are several hundred dollars less per month. We might decide to just keep paying our old monthly amount and get it paid off in 6 years instead of 8 as before. When inflation goes to 7% in a few years, I'll be kicking myself for not getting a 30 year fixed and making the minimum payments with deflated dollars.

I suspect you will be. I'm wishing I could refinance, but I'd only go with a 30 year fixed. I'm currently at 4.75%, so even if I could drop it to 3.35% or so for 15 years I'd end up with a higher payment, which I don't want. Plus, I'm trying to keep equity out of my house (got too much already), so why pay it off sooner? But it's a moot point, since I can't seem to refinance down. The home with the mortgage is our second home. It used to be our primary residence, but we switched for various reasons. So refinancing a second home gets you a higher rate. I tried to see if I could pay this mortgage off and get a new one on our primary residence, which we own outright. But then I would be getting a cash out mortgage, which is also a higher rate. My only option for refi is to switch my residences again, which isn't worth it. So, when interest rates get to 7% in a few years I'll be glad I'm paying 4.75% in inflated dollars, but wishing it could have been 4%.

 

[Bimmerbill]

I guess I am looking for a refi where they pay some of the closing costs. I don't have the available cash now to pay it upfront, but would like to drop 1% on the mortgage rate.

 

[brewer12345]

I guess I am looking for a refi where they pay some of the closing costs. I don't have the available cash now to pay it upfront, but would like to drop 1% on the mortgage rate.

PF and Navy Fed advertise it, but most brokers and lenders will do the same thing. They typically take a slightly higher rate in return for a credit toward your coling costs. Start poking around and you will find it.

 

[PaddyMac]

We're looking at refinancing too, and are thinking about AmeriSave. Their rates are good, and they seem to have very good reviews (unlike some of the internet banks that have slightly lower rates).

Anyone have experience with Amerisave?

 

[rayvt]

Yes. Refi'ed with them twice. Good experience, low hassle, quick closing.

 

[blessed]

I refinanced with BB&T in Sept. @ 4.0 for a 20 year. I had my previous note with them and it was very smooth, no closing costs or junk fees. They are very professional. I had gotten the run around 2 years earlier with an on-line bank and so I had never refinanced since I bought the house in 2003 with a 6% 30 year. This refinance dropped almost 200 off the payment each month and 2 years til I am paid up.

 

[Bimmerbill]

What about some of the 3/5 or 5/5 ARM deals? What's the disadvantages of those types of loans?

 

[samclem]

What about some of the 3/5 or 5/5 ARM deals? What's the disadvantages of those types of loans?

They didn't appeal to me--I can't imagine rates going down (much) from here, and plenty of potential for them to go higher. If/when inflation takes off I'll enjoy paying that loan off very slowly.

I wonder if mortgage companies ever offer inducements to get folks to pay off their lower-rate loans when rates go up? It could mean a nice check--or at least a toaster.

 

[brewer12345]

What about some of the 3/5 or 5/5 ARM deals? What's the disadvantages of those types of loans?

I did the 5/5 this summer. It is fixed for 5 years than adjusts no more than 2% for the next 5 years and they cover closing costs. Works for me and the low limit on the rate change means this is a lot less risky than a 5/1 which can adjust up to 5% at the first reset.

 

[Finance Dave]

What about some of the 3/5 or 5/5 ARM deals? What's the disadvantages of those types of loans?

The disadvantage is that those rates may increase substantially upon reset, and leave one unable to pay a significantly higher payment. If you can afford to simply pay off the entire loan when/if that happens, then I see no issue with them.

 

[BellBarbara]

We are doing a 7/1 ARM @ 3%. We do pay costs, but we make them back in less than a year. We think 7 years is about the most time we will want to be in this house, and we could also pay it off in cash at any time.

 

[WanderALot]

The disadvantage is that those rates may increase substantially upon reset, and leave one unable to pay a significantly higher payment. If you can afford to simply pay off the entire loan when/if that happens, then I see no issue with them.

As Brewer said, the PenFed 5/5 ARM actually has a 2% cap, so the most it can go up is 2% every 5 years and up to a maximum of 5% over the life (30 years) of the loan.

Considering they are often very low cost and have attractive rates, they can pretty good deals.

 

[Milkman]

We are going through a 7 year ARM refinance at 2.875%. We will be paying closing costs as well, but should break even in about a year. Currently we are 3.5 years into a 15 year mortgage at 5%. Our intention is to pay off the house during this 7 year period.

Milkman

 

[BellBarbara]

I keep thinking we should pay it off during the 7 years, but I think we will downsize and move to a less expensive area so not need to pay it off. I guess we'll see how it goes.

 

[ohyes]

We just signed a thousand papers this morning (took an hour an a half!). We went from 6.2 to 3.875. Yes, we were slower to act than just about everybody and their dog.

It will take us 13 months to recoup, which should work, because we are listing the house next spring and figure on it taking a few months to sell. Our last house was a fixer-upper, 100 year old home, and took 18 months to sell, so we are jaded. ALTHOUGH, the guy who bought it flipped it and turned it into something beautiful. It is on the cover of a book about the history of our town. We take pride it that, although he did most of the work, lol.

It lowers our payments by a couple hundred a month. Since DH has already retired, it will help.

We went through the evil BOA, since our original mortgage was with them.

 

[Bimmerbill]

I called USAA and to get the 3.825 rate it involved a lot of points! VA loan points were cheaper, but the VA loan fee was high.

 

[brewer12345]

Looks like Navy Fed is offering 3.875% for 1.875 points, or .875 pointd for a .25% increase in the rate. They offer to eat up to $2500 in closing costs.

 

[samclem]

I called USAA and to get the 3.825 rate it involved a lot of points! VA loan points were cheaper, but the VA loan fee was high.

If you haven't done it, I'd recommend that you go to the USAA web site and use their mortgage calculator to see your options. At least for me, that's much better than doing this kind of thing by phone. It takes about 2 minutes and you can check out the various point/APR combinations for 30 year fixed, 15 year fixed, 5-1 ARM, etc. You can expand the options to see the difference in monthly payments, etc. Be sure to take a look at that--at these rate levels, a .25% difference in APR equates to about $13 per month in payments for each 100K borrowed. It might make sense to pay the points if you plan to keep the house (and the mortgage) a long time, but if you'll be selling in a few years it's probably advantageous to take the higher rate loan.

Along the same lines, maybe back up a step and see if the costs you'll incur (points and settlement costs, etc) even make it worthwhile for you to refinance given the amount of time you plan to be paying this mortgage.

Any points can be included in the loan amount, if that makes things easier regarding money required at the closing of the loan. It's still money that you owe, but at least you don't need dollar bills when you sign the papers.

 

[Bimmerbill]

Well, my goal is to get a lower payment since I need some cash to recover from my recent divorce. I'd like to move closer to work, but that may not be possible due to child custody issues.

I am not sure what USAA was talking about when I spoke to them. The rep said something about 9 points and I said I've never seen a loan with 9 points. That was to get the rate 3.825.

I'll check out Navy Fed again though, thanks!

 

[samclem]

I am not sure what USAA was talking about when I spoke to them. The rep said something about 9 points and I said I've never seen a loan with 9 points. That was to get the rate 3.825.

bimmerbill,
For your reference, today at USAA:
30 Yr fixed rate 3.875% (APR = 4.138%), costs 2 points, monthly P&I per $100K borrowed = $771
30 Yr fixed rate 4.250% (APR = 4.388%). costs 0.5 points, monthly P&I per $100K borrowed = $793

15 yr fixed rate 3.25% (APR = 3.598%), costs 1.25 points, monthly P&I per 100K borrowed = $ 1005
15 yr fixed rate 3.625% (APR = 3.791%), costs 0.0 points, monthly P&I per 100K borrowed = $1024.

Of course the web site has many other options of points/rates, as well as the rates and caps for 5/1 ARMs.
When comparing rates, it's useful to use APRs rather than the "interest rate".