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Glue Sniffer
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Discussion Starter · #1 ·
I like my little shoebox of a house, and I plan on living in it for quite a while. When we bought the place a few years ago, mortgage rates were pretty low and we got in at a rate of 6.125.
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Now, the rates are ridiculously low and I’m thinking about refinancing. That being said, I’m a self-doubter who will easily research myself into a state of stagnation. So, what’s between sticking my head in the sand, content with my 6.125, and calling every mortgage company in the business finding out their rates and closing costs?
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Should I just call up two or three places? Should I go back to the mortgage broker I used previously? Or should I just call up my current mortgage holder and see if they’ll slide on some of the financial documentation since they already own my mortgage?
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Any other advice from y’alls collective experience?
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Good news everyone!
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I would start by calling the current mortgage holder. Basically you'll be taking your business elsewhere, so if they're smart they'll cut you a deal and maybe you won't even have to pay all of the associated fees if you stick with them. If they don't offer you anything, call the previous mortgage broker if you liked him, and see what he can do.
 

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Call me a Fred
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It never hurts (much) to ask around. The longer you have to go on your current mortgage, the more financial sense it makes to refi.
 

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Proud luddite
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Jim311 said:
I would start by calling the current mortgage holder. Basically you'll be taking your business elsewhere, so if they're smart they'll cut you a deal and maybe you won't even have to pay all of the associated fees if you stick with them. If they don't offer you anything, call the previous mortgage broker if you liked him, and see what he can do.
+1. We did that and our current lender cut a full 2% off of our rate. We had about 20 years left to pay off the mortgage, added in a home equity loan balance, kept the monthly payments the same and still managed to knock a full 5 years of payments off, leaving us with 15 years to pay it off. We were very happy with that and the whole process was amazingly easy to complete.
 

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banned from the museum
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If you refi, don't add years onto your current mortgage. If you bought your place 5 years ago and got a 30 year mortgage, then get a 25, or a 15. Don't get a brand-new 30. Shorter mortgages have lower rates, so this works in your favor. I refinanced, got 2% better interest rate, and went from a 30-year mortgage to a 15 year mortgage. I pay less than $200 more a month versus the 30-year mortgage.

Shop it around, but don't give the mortgage company all of your information. Call them and tell them about what your credit score is, and what you are looking for. Tell them you will get specific when you are done shopping. Having 20 lenders pull your credit report actually lowers your score.

Yes, you can refinance and come out ahead on the deal.
 

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Captain Obvious
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11,876 Posts
since you haven't been there long, you really benefit from a refi. even if you go 30yr to 30yr. bloomberg.com has various mortgage calculators to compare various mortgages. this will give you an idea if you can swing a shorter term mortgage. IIRC, you should probably knock 1.5% off your rate.
 

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"El Bwana"
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PM'd you. No, I don't work in the business.
 

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Moderatus Puisne
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Do it.

Presuming your credit, income, etc are all solid and you can get whatever the current "best" rates are, it sounds like a good idea. One big caveat will be whether or not your house has lost value in the crash since you bought it. If it has, the "total loan to value" ratio may be such that it's hard to refi.

That depends a lot on your region.

As others have said, use the calculators -- but generally you come out ahead if you can lop a full percentage point off of your loan, for at least 15 years.

1.375 for 25 years or whatever is a pretty good gain.

There will be lots of offers about "no fee," but many of them do mean "no OUT OF POCKET" fees, and will roll some fees in.

Your current lender may have a program for just such a situation which isn't a traditional refinance -- I am a little behind the curve because this stuff is so new.

In short, though, even if you did pay a full broker fee, you'd probably still come out ahead, and you have a pretty good chance of not having to pay anywhere near that.
 

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Beetpull DeLite
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Doesn't hurt to call. Indy and I are in the process of a refi now, going from a 30 yr 5.625% to a 15 yr 4.25%, with only $325 closing costs. Shop around, closing costs vary quite a bit.
 

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Captain Obvious
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GirchyGirchy said:
Doesn't hurt to call. Indy and I are in the process of a refi now, going from a 30 yr 5.625% to a 15 yr 4.25%, with only $325 closing costs. Shop around, closing costs vary quite a bit.
i wish i could make that move. monthly payment just goes up more than i care for.
 

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More carbon fiber please!
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Just did the deal on our house. Added in $20K to remodel one bathroom and roof the house. Rates dropped enough that payments are lower than they were before and still in 10 yrs it's paid off. Can't beat that.
 

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Registered
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GirchyGirchy said:
Doesn't hurt to call. Indy and I are in the process of a refi now, going from a 30 yr 5.625% to a 15 yr 4.25%, with only $325 closing costs. Shop around, closing costs vary quite a bit.
What percentage did your monthly go up?
 

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Shirtcocker
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60,639 Posts
catzilla said:
I like my little shoebox of a house, and I plan on living in it for quite a while. When we bought the place a few years ago, mortgage rates were pretty low and we got in at a rate of 6.125.
<!--[if !supportEmptyParas]--> <!--[endif]--><O></O>
Now, the rates are ridiculously low and I’m thinking about refinancing. That being said, I’m a self-doubter who will easily research myself into a state of stagnation. So, what’s between sticking my head in the sand, content with my 6.125, and calling every mortgage company in the business finding out their rates and closing costs?
<!--[if !supportEmptyParas]--> <!--[endif]--><O></O>
Should I just call up two or three places? Should I go back to the mortgage broker I used previously? Or should I just call up my current mortgage holder and see if they’ll slide on some of the financial documentation since they already own my mortgage?
<!--[if !supportEmptyParas]--> <!--[endif]--><O></O>
Any other advice from y’alls collective experience?
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What's the going rate today? If 2% or more less than what you're paying you probably should do it. If only marginally lower then the costs associated would probably not make it pay. We used a broker last time and locked in a 4.75% rate for a 15 year--went from a 30 to a 15 and am paying basically the same monthly payment as we were before. I haven't bothered looking at refi lately as I don't think the rates will ever be low enough to make it worth the hassle.
 

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waterproof*
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make sure you figure how many years ROI payback on your closing costs... is it worth it?

also, Well Fargo was our first mortgage holder, they had a free refi - no closing costs, we did it at home via Fedex. So don't settle for $5k in closing costs.
 

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Meow!
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lampshade said:
What percentage did your monthly go up?

Girchy can correct me if I'm wrong, but I think it went up about 20 percent from our original monthly payment.

When we bought the home last September, only Girchy was on the note/mortgage--so that we could take advantage of the first-time-buyer credit. Up until May, however, I was still carrying the mortgage and expenses on my own home. So, even with the refi to a 15-year mortgage, we'll paying less than we were when we were carrying both houses.

Did I mention how happy I am that I finally sold my house? :thumbsup:
 

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indysteel said:
Girchy can correct me if I'm wrong, but I think it went up about 20 percent from our original monthly payment.

When we bought the home last September, only Girchy was on the note/mortgage--so that we could take advantage of the first-time-buyer credit. Up until May, however, I was still carrying the mortgage and expenses on my own home. So, even with the refi to a 15-year mortgage, we'll paying less than we were when we were carrying both houses.

Did I mention how happy I am that I finally sold my house? :thumbsup:
Good job on the sale. We are in a 30yr @ 5.75 (house bought in early 2008) and are debating refi-ing to a 15yr.
 

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Meow!
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lampshade said:
Good job on the sale. We are in a 30yr @ 5.75 (house bought in early 2008) and are debating refi-ing to a 15yr.
Thanks!

Even if you don't do a 15, it might be worth your while to refi now, perhaps to a 25 or 20 year loan, especially if you can get a loan with low closing costs. Do you plan to be in the house for a while? I seem to recall the conventional wisdom being that if you can shave off a whole point, it's often worth it. I suppose that really just depends on the closing costs and how long you anticipate staying in the house.
 

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Fini les ecrase-"manets"!
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Bocephus Jones II said:
went from a 30 to a 15 and am paying basically the same monthly payment as we were before. I haven't bothered looking at refi lately as I don't think the rates will ever be low enough to make it worth the hassle.
This is what we did, and the difference in the total amount of the two loans (30 year vs. 15 year) over their lifetimes was something like $100K, because of the interest. So we knocked a ton of time of the mortgage and saved a bundle, all with our monthly payment going up like $100.
 

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p != b
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or, you could go ahead with the refi, have an appraisal done, and find out that you're upside-down on the house. (and thus can't refi)

oh wait, that's what we did... :(
 
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