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Started By
Message
re: I'm struggling to figure out if refinancing makes sense for my situation.
Posted on 9/10/20 at 10:11 am to whitefoot
Posted on 9/10/20 at 10:11 am to whitefoot
quote:
whitefoot
Just to highlight my initial response/comment, your two comparisons appear to only use minimum payments for each loan. It’s important when comparing a 30y and 15y to ensure you use the same payment in each (higher payment for existing 30y).
When doing this, the spread in interest paid drops as does the payoff date.
1
Posted on 9/10/20 at 10:20 am to whitefoot
quote:
Not sure who you called but the rates are out there. Check the link I posted. Go to bankrate.com. Go to nerd wallet. They post rates from many lenders.
I went to LendingTree.
I just checked Nerd Wallet and the interest rate spread I'm seeing is 2.5-3.5% for a 15 year refinance. No where near the 2% or lower range as suggested on the Log Cabin mortgage site that you recommended.
LINK
This post was edited on 9/10/20 at 10:30 am
Posted on 9/10/20 at 1:27 pm to LSUtigerME
quote:
Just to highlight my initial response/comment, your two comparisons appear to only use minimum payments for each loan. It’s important when comparing a 30y and 15y to ensure you use the same payment in each (higher payment for existing 30y)
For sure. That's why I linked the calculator so he can play with it how he wants. I didn't want to assume that he was going to automatically put the extra $75 into the existing 30 year. I was just showing him that refinancing was a no-brainer.
Posted on 9/10/20 at 1:54 pm to Hammond Tiger Fan
Gotcha. I'd just check rates daily. I see Loan Cabin isn't available in Louisiana. But today they are at 2.125% with $315 in points.
Anyway, it's all numbers and math. Play with that calculator I linked. It will show you all the numbers you need to know. I see you can probably get 2.25% with .8% points from a lender on Bankrate.com. That would still save you a lot of money, but I think you can probably find better if you're patient.
Rates are going to be low for a while, but you should probably make a decision soon because starting December 1, there is going to be a .5% adverse market fee added to your closing costs. Then again, who knows. Maybe once the new fees kick in, volume will decline and the offers will get better.
Anyway, good luck with your decision.
Anyway, it's all numbers and math. Play with that calculator I linked. It will show you all the numbers you need to know. I see you can probably get 2.25% with .8% points from a lender on Bankrate.com. That would still save you a lot of money, but I think you can probably find better if you're patient.
Rates are going to be low for a while, but you should probably make a decision soon because starting December 1, there is going to be a .5% adverse market fee added to your closing costs. Then again, who knows. Maybe once the new fees kick in, volume will decline and the offers will get better.
Anyway, good luck with your decision.
Posted on 9/10/20 at 5:52 pm to LSUtigerME
This board is so fricking helpful sometimes. Great reply.
Posted on 9/11/20 at 8:25 am to whitefoot
Is it usually the case that smaller, more local lenders will have better rates than big(ger) banks?
Starting this process now, and looking for ideas of who to contact first
Starting this process now, and looking for ideas of who to contact first
Posted on 9/11/20 at 9:02 am to fillmoregandt
quote:
Starting this process now, and looking for ideas of who to contact first
Obviously, I'm searching for the same.
For my situation, on bankrate.com this morning an independent lender popped up with a 15 yr fixed 1.99% and upfront costs of $1,861 which included a 0.492 points. I might inquire about this today.
LINK
ETA:
Ok. I just got off the phone with them. The numbers bankrate is showing isn't completely accurate. The rate for 15 yr is 1.875% with a buy down of 1 point. It's not 0.492 points like bank rate is showing.
No points for a 15 yr is 2.125%.
The total costs with the points (if opted), attorney fees, appraisals, filing fees, and other related closing costs will be around $4,500 - 5,000.
This post was edited on 9/11/20 at 10:02 am
Posted on 9/11/20 at 4:55 pm to Hammond Tiger Fan
Always look at the APR. This will factor in upfront points as well as the interest rate.
2.125 with no points sounds like a winner to me, though. Make sure to ask if they allow you to improve your rate if it drops after you lock. Loan cabin allowed me a one-time rate improvement after locking as long as the rate dropped .25% or more.
2.125 with no points sounds like a winner to me, though. Make sure to ask if they allow you to improve your rate if it drops after you lock. Loan cabin allowed me a one-time rate improvement after locking as long as the rate dropped .25% or more.
Posted on 9/11/20 at 4:59 pm to fillmoregandt
quote:
Is it usually the case that smaller, more local lenders will have better rates than big(ger) banks?
From doing my own shopping earlier in the summer, it seems that national, regional, or multi-state online mortgage companies/brokers have better rates than the traditional big banks, like Chase, Wells Fargo, etc. I basically just checked rates on various sites daily until I got one I liked.
Posted on 9/11/20 at 11:02 pm to whitefoot
quote:
Unless you're moving soon or won't qualify for a good rate, this is a poor decision. To avoid "paying" a few thousand in closing costs, you're going to end up paying so much more in interest over the life of the loan. I put "paying" in quotes, because you just roll the closing costs into the loan. You'll still come out way ahead.
Don't think that's right in my case. I did the math & had a mortgage broker do it also.
I owe $207k on my house. I'm 4 years into the current 3.625% rate on a 30 year mortgage. If I pay an extra $400 per month, then it'll cost me a total of $236k between now & when it's paid off in 13 more years.
If I did a 15 year refinance at 2.00% & paid nothing for closing costs, then it would cost me $240k in just principal & interest over that 15 years.
So I'm choosing to pay the extra $400 per month on my existing 30 year without refinancing & save on the closing costs.
If you were referring to not paying any extra on the current 30 year mortgage, then yes, refinancing to a 15 year rate absolutely makes sense.
Posted on 9/12/20 at 9:01 am to LSU
Check out that calculator I linked. It can give you all the numbers you want to know. I was in your situation earlier in the summer. 7 years into a 3.625% mortgage and I didn't really want to mess with a refinance, but I could just never make the numbers favor not refinancing.
Without knowing the original principal and if you've always paid $400 extra, I had to kind of guess. So I'm assuming your original loan was around $225k and you've paid $400 extra since inception. This gives a current balance of around $207k. Here's what the remainder of that mortgage looks like if you continue paying $400 extra.
Payoff in 16 years
The remaining balance is $207,134.42. By paying extra $400.00 per month, the loan will be paid off in 16 years. It is 10 years earlier. This results in savings of $47,053.81 in interest.
If Pay Extra $400.00 per month
Monthly Pay $1,426.12
Total Payments $322,347.75
Total Interest $97,347.75
Remaining Payments $273,094.21
Remaining Interest $65,959.79
The Original Payoff Schedule
Monthly Pay $1,026.12
Total Payments $369,401.55
Total Interest $144,401.55
Remaining Payments $320,148.01
Remaining Interest $113,013.59
Here is $207k on a 15 with $5k in closing costs rolled in (so financing $212k) at 2.25%.
Normal loan repayment without extra payments:
Monthly Pay $1,388.78
Total Payments $249,980.35
Total Interest $37,980.35
If you pay the extra $37/month on the 15 year to make the payments match, you shave 5 more months and about $1000 in interest off.
Payoff in 14 years and 7 months
The remaining balance is $212,000.00. By paying extra $37.00 per month, the loan will be paid off in 14 years and 7 months. It is 5 months earlier. This results in savings of $1,219.16 in interest.
If Pay Extra $37.00 per month
Monthly Pay $1,425.78
Total Payments $248,761.19
Total Interest $36,761.19
Without knowing the original principal and if you've always paid $400 extra, I had to kind of guess. So I'm assuming your original loan was around $225k and you've paid $400 extra since inception. This gives a current balance of around $207k. Here's what the remainder of that mortgage looks like if you continue paying $400 extra.
Payoff in 16 years
The remaining balance is $207,134.42. By paying extra $400.00 per month, the loan will be paid off in 16 years. It is 10 years earlier. This results in savings of $47,053.81 in interest.
If Pay Extra $400.00 per month
Monthly Pay $1,426.12
Total Payments $322,347.75
Total Interest $97,347.75
Remaining Payments $273,094.21
Remaining Interest $65,959.79
The Original Payoff Schedule
Monthly Pay $1,026.12
Total Payments $369,401.55
Total Interest $144,401.55
Remaining Payments $320,148.01
Remaining Interest $113,013.59
Here is $207k on a 15 with $5k in closing costs rolled in (so financing $212k) at 2.25%.
Normal loan repayment without extra payments:
Monthly Pay $1,388.78
Total Payments $249,980.35
Total Interest $37,980.35
If you pay the extra $37/month on the 15 year to make the payments match, you shave 5 more months and about $1000 in interest off.
Payoff in 14 years and 7 months
The remaining balance is $212,000.00. By paying extra $37.00 per month, the loan will be paid off in 14 years and 7 months. It is 5 months earlier. This results in savings of $1,219.16 in interest.
If Pay Extra $37.00 per month
Monthly Pay $1,425.78
Total Payments $248,761.19
Total Interest $36,761.19
Posted on 9/12/20 at 9:33 am to whitefoot
I am in the same boat as far as making extra payments and trying to decide if refinancing makes sense. We are planning on staying in the house until retirement which will be around 2045.
Current mortgage is a VA loan with US Bank
Original loan date is June, 2015
Original amount 260k 3.25% rate
I have been paying 2k extra a month for the past year
Current balance is 206,599
I saw yesterday someone post getting a 1.875% 15 yr rate with I-bank in Memphis. I live right outside of Memphis.
My goal is to payoff the mortgage as fast as I can, but I’m not sure if refinancing would make enough of a difference for the hassle
Current mortgage is a VA loan with US Bank
Original loan date is June, 2015
Original amount 260k 3.25% rate
I have been paying 2k extra a month for the past year
Current balance is 206,599
I saw yesterday someone post getting a 1.875% 15 yr rate with I-bank in Memphis. I live right outside of Memphis.
My goal is to payoff the mortgage as fast as I can, but I’m not sure if refinancing would make enough of a difference for the hassle
This post was edited on 9/12/20 at 10:06 am
Posted on 9/12/20 at 10:06 am to dltigers3
You may want to look into a VA Interest Rate Reduction Refinance Loan.
Posted on 9/12/20 at 10:21 am to Hammond Tiger Fan
So is your current monthly P&I payment $1,018.00?
If yes, don't refinance and pay like it's the 15 note. Or, refinance and pay the extra principal that way. At 8 yrs in on your current note you've paid an abundance in interest. Your going to increase principal payment either way.
If yes, don't refinance and pay like it's the 15 note. Or, refinance and pay the extra principal that way. At 8 yrs in on your current note you've paid an abundance in interest. Your going to increase principal payment either way.
Posted on 9/12/20 at 11:46 am to dltigers3
My refi was with NASB. It was VA jumbo 30 yr refi IRRRL I got at 2.25. Paid about a half a point.
Posted on 9/12/20 at 12:05 pm to LSU
quote:
owe $207k on my house. I'm 4 years into the current 3.625% rate on a 30 year mortgage. If I pay an extra $400 per month, then it'll cost me a total of $236k between now & when it's paid off in 13 more years.
There is no way you will only pay $29k in interest over the next 13 years. This is really bad math and it’s costing you money.
This post was edited on 9/13/20 at 6:51 pm
Posted on 9/13/20 at 5:23 pm to Hammond Tiger Fan
I had almost the exact same situation.
Bought house in 2012 for $275k.
Interest rate was 3.5%
Loan was for 30 years.
I just refinanced for 15 years (Rocket Mortgage)
Interest rate is 1.99%
Loan is for 15 years.
My note went up only $100 a month and I shaved 7 years off my note.
It's a no brainer for 15 yr...
Bought house in 2012 for $275k.
Interest rate was 3.5%
Loan was for 30 years.
I just refinanced for 15 years (Rocket Mortgage)
Interest rate is 1.99%
Loan is for 15 years.
My note went up only $100 a month and I shaved 7 years off my note.
It's a no brainer for 15 yr...
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