Refinancing Mortgage - Appreciate Advice

[Animorph]

That is certainly good advice. I re-financed after I retired and had no problem. I needed to show them a steady stream of income and investments that proved I had enough cash to cover the monthly costs.

-- Rita

Some of us total returners have a problem showing that "steady stream of income" when it's coming from equity sales instead of conventional "income" sources. DW is still working and had enough income to cover our 2009 refi. They never asked about the portfolio, just income.

 

[inquisitive]

I'm trying to get a 15 year fixed and am deciding between a 2.875% rate and 2.750%. Both are obviously low, but I'd have to pay about $1200 more in points to get the 2.750. Over the 15 yrs I think that it would be about $3000 more for the 2.875%. So it seems like I should pay for the lower rate, right? Using a compound interest calculator, it seems like I would have to get 6.5% on the $1200 to make up the difference which is higher than a CD. Am I thinking about this right?

 

[inquisitive]

I'm trying to get a 15 year fixed and am deciding between a 2.875% rate and 2.750%. Both are obviously low, but I'd have to pay about $1200 more in points to get the 2.750. Over the 15 yrs I think that it would be about $3000 more for the 2.875%. So it seems like I should pay for the lower rate, right? Using a compound interest calculator, it seems like I would have to get 6.5% on the $1200 to make up the difference which is higher than a CD. Am I thinking about this right?

Any thoughts? Maybe I should put this in a separate post.

 

[Gotadimple]

Your message contains at least two questions (I think):
2.875 v 2.750 with points -- see the Mortgage Professor's website for an analysis of which is best. Points are not the only thing to consider.

What off-settiing investment return would be needed to make up the $1200 difference in points. Again, see the Mortgage Professor's web site for an analysis.

 

[sailor]

As the rates are going down, I decided to post again on this thread.
I just applied for a refinance with my existing lender (saves on intangible tax in GA): 2.5% rate with .375 points for 15 years conforming loan.
Also managed to drop escrow at the same time, with no increase in rate/points.
Hope to close in 3 weeks.

 

[Animorph]

We're closing on 3.25% tomorrow. More than 1% lower than our old mortgage. And rates are even lower now.

 

[Texas Proud]

I am working on a 3.125% for 15 years... low cost to refi....

I am surprised how much the 'cost' moves day by day...

 

[MBAustin]

We refi'd about a month ago - 2.75%, no points, 15 yrs. I asked for 10 yr. but the lender said it was the same rate, so we went with 15 and can pay down early if we want. Easy money to go down from 4.875% which we thought was the lowest rates could ever go when we got that rate 3 years ago.

 

[HFWR]

Dang, I feel cheated with my 3.75%, 30yr fixed. But the house will be mine in 2042...

 

[HawkeyeNFO]

Dang, I feel cheated with my 3.75%, 30yr fixed. But the house will be mine in 2042...

Same rate I received when I closed back in June this year. Currently doing a refi down to 3.25% for a 30 yr VA loan. Lender credits are nearly double the closing costs, so it's a no-brainer to do a refi. Wish I could afford the payments on a 15 yr loan, those rates are crazy-low!

 

[HFWR]

Same rate I received when I closed back in June this year. Currently doing a refi down to 3.25% for a 30 yr VA loan. Lender credits are nearly double the closing costs, so it's a no-brainer to do a refi. Wish I could afford the payments on a 15 yr loan, those rates are crazy-low!

I'm more interested in getting my payment as low as possible. Paying the thing off is not a priority.

 

[Bimmerbill]

I just applied at a local CU for a 15 year fixed at 2.5%, 0 points, closing costs about $3K.

 

[Texas Proud]

I just applied at a local CU for a 15 year fixed at 2.5%, 0 points, closing costs about $3K.

Seems like a good rate... but it makes a difference on how much you owe... they can make a better deal if you owe a lot...

 

[sailor]

Seems like a good rate... but it makes a difference on how much you owe... they can make a better deal if you owe a lot...

Can you elaborate how much is a lot?
The lender I'm dealing with has higher rates (about .25%) for jumbo loans (up to 3 million I think) versus conforming loans.

 

[Texas Proud]

Can you elaborate how much is a lot?
The lender I'm dealing with has higher rates (about .25%) for jumbo loans (up to 3 million I think) versus conforming loans.

If you go to Box Home Loans (can not remember who suggested it, but thanks)...

Put in a loan for $150,000 and look at a rate....

I get a total cost of $867 for a 3.125 15 year loan...

Put in $300,000 and you can get a 3.125 15 year at no cost...

I was surprised that the higher loan cost more at 2.5%... but at that rate you are paying points.... instead of getting them....


SOOO, nevermind....

 

[Bimmerbill]

Well, I am going from a 30 year at 4.875 with 26 years left to a 15 year at 2.5%. $150K financed. Will cut off many years for about $150-160 extra a month.

 

[NinjaPigeon]

For a refi, is it better to roll the closing costs into the loan or pay them at the table? Closing costs for me would be close to $6k, which would take me 3 years to get back based on my monthly savings.

 

[susswein]

I refinanced in January. I was turned down by 3 or 4 mortgage companies (with a credit score over 800!) because I've arranged my finances such that I show almost no income on paper. I finally found one company that was able to qualify me under the federal HARP II program. Interest was bit over market rates at 4% on a 30 year fixed, but the APR was also 4% since there were zero closing costs (they even paid for the appraisal).

 

[Texas Proud]

For a refi, is it better to roll the closing costs into the loan or pay them at the table? Closing costs for me would be close to $6k, which would take me 3 years to get back based on my monthly savings.

I refinanced in January. I was turned down by 3 or 4 mortgage companies (with a credit score over 800!) because I've arranged my finances such that I show almost no income on paper. I finally found one company that was able to qualify me under the federal HARP II program. Interest was bit over market rates at 4% on a 30 year fixed, but the APR was also 4% since there were zero closing costs (they even paid for the appraisal).

I would look into doing a refi with less closing costs... such as susswein did...

I did mine in Nov and elected for a higher rate with closing costs of about $700... if I got a lower rate, the closing cost increases would take a minimum of 5 years to recover and a maxium of 14!!! On a 15 year loan...


I forget who posted it here and would like to give due credit... but look into Box Home loans... they were great, even if a bit nerve racking on some of the requests...

I also found this site...Home Loan Enterprise, but they are not in many states and when I did pull the trigger were a bit higher than Box... for awhile, they were cheaper, so it moves all the time...

 

[boont]

ReFi

Closed a Penfed 30yr fixed about three weeks ago at 3.375. Took a long time start to finish, about 90 days from first inquiry.

The good: best rate I could find on a second home, all done through email, sent someone to my house for signing.

The bad: big hassles about any non W-2 income, had to send tons of paperwork to prove income (even with FICA of 803), country property appraisal was $300 and came in low (which is happening all across the country as banks freak about having to buy back loans if not done right, see today's Wall Street Journal). but in the end, the low value was still triple the loan amount so it didn't matter.

I would use them again because they have the best rates. I was able to lower my payment and still pull out 50Gs.

boont (posted earlier but this seems a better spot for it)

 

[racy]

... they are not the most speedy, efficient crew I've ever dealt with. I envision this little office somewhere in Nebraska, staffed with ladies - men, too! - who wear cat-eye glasses on lanyards, and cardigan sweaters draped over their shoulders. Amethyst

What are you, an anti-Nebraskite?!

Seinfeld The Yada Yada: Anti-Dentite - YouTube

 

[panhead]

Closed a 30 yr fixed penfed mortgage at 3.125% last week. I agree with most of the posts I see here, they lost a lot of things that I had to re-send multiple times, took a long time to get to closing, but I was reassured that the rate lock would be honored (which it was), and they asked for a boatload of documentation about income and savings. I'm still happy with it, as the closing costs were reasonable and the rate was excellent. Hey, it's practically the historical inflation rate!

 

[LakeTravis]

Closed a refi on a second home earlier this month, went from 4.75% to 3.5%. Was able to skip both Jan and Feb payments (a total of $2480) with $980 out of pocket, so a net initial savings of $1500 and continued monthly savings of $360. Entire process took about 75 days, with multiple ridiculous requests for information on things I've never had them ask for before during a mortgage app and I've done many over the past 25 years.

Requirements are very stringent, and with home sales starting to rise it makes me wonder just how hard the lid will blow off future sales when the mortgage qualifying requirements cycle swings back the other way as you know it will.

Many who exited the mortgage markets (like BOA) are starting to come back in full force, much like insurance companies who pull out of writing policies in a disaster area and then go back years later when they believe it will be profitable again.

It only took two weeks for me to get a letter from the original mortgage company at closing earlier this month (Interbank) that they had assigned/sold/tranferred the note to Wells Fargo. Ironic, because that is who the original note was with and they acted like they weren't interested in refinancing a second home back in October when I started this process.