Should I refinance with these numbers? | TigerDroppings.com

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lsursb
LSU Fan
Baton Rouge
Member since Jan 2004
5584 posts

Should I refinance with these numbers?


I have a 30 year mortgage at 5.25%. I have been in the house 3.5 years and plan to stay here for the foreseeable future. Got a quote yesterday for 3.875 on 30 year refinance. It would save me about $130 a month. No out of pocket costs to refi. What should I look at to determine if it is worth adding back 3 more years of payments to save $130 a month?






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nogoodjr
Member since Feb 2006
281 posts

re: Should I refinance with these numbers?


I just recently did a 15 year refi at 2.75% with no points and no origination. Probably only raise your payment a small amt and save you 11.5 years. 20 yr would be another option.





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Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
39345 posts

re: Should I refinance with these numbers?


3.5 years is nothing with that savings. What you need to check though is that you dont have any changes to PMI. If it was an FHA loan also check to see how the rule changes affect the loan. MPI rates went up about a year ago. So that could put a dent in your savings. If it was a conventional loan it should be a no brainer.





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lsursb
LSU Fan
Baton Rouge
Member since Jan 2004
5584 posts

re: Should I refinance with these numbers?


The PMI has increased, about $30 a month over what I am paying now, but that still results in about $130 a month saving.





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novabill
LSU Fan
Crossville, TN
Member since Sep 2005
5397 posts

re: Should I refinance with these numbers?


Look at the savings with single payment PMI.

Were you in the military? I am surprised at how many vets do not have va loans.







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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
534 posts

re: Should I refinance with these numbers?


Correct me if my math is wrong, but do you still owe around $140k and your P+I payment (not including escrow) is currently around $810?

That's the approx figures I came up with. Just making sure before I throw any other figures out there.

Edit: Also you mentioned no out of pocket costs. What amount are they charging you that they are rolling into the loan amount?



This post was edited on 2/22 at 10:12 am


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lsursb
LSU Fan
Baton Rouge
Member since Jan 2004
5584 posts

re: Should I refinance with these numbers?


I actually owe a bit over $160,000. My P+I now is $956. The estimated closing costs they are quoting is $2345.00. They say I will get $589.17 back at closing. They are saying the new P=I would be $790, but my Mortgage Insurance is increasing by $30 a month over the current cost.

These are just preliminary figures, based on the information they had from my original purchase of the house.






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Will Cover
Southeastern LA Fan
Bangor, ME
Member since Mar 2007
24436 posts

re: Should I refinance with these numbers?


New Penn Financial is offering 3.5 % on a 30 year loan and 2.75 % on 15 year.

They only charge $995 for their fee.







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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
534 posts

re: Should I refinance with these numbers?


Here are my figures on your numbers you gave me. Granted they are only estimations, but it should give you an idea of how to compare your current loan to your proposed loan.

Current loan $160k @ 5.25% paying $956 P+I
*Will pay $128,500 interest over next 25.15 years
*Balance 10 years from now => $119,700
*Balance 20 years from now => $51,600

Proposed loan $162,345 @ 3.875% pay $790 P+I
*Will pay $112,000 interest over 30 years
*Will pay add'l $3,900 more PMI over 130 payments
to get balance down under $124K
-assuming value of 160k and under 78% no PMI
*Balance 10 years from now $127,000
*Balance 20 years from now $75,800

Proposed loan $162,345 @ 3.875% but pay $956 P+I
-same payment but $30 going extra to PMI
*Will pay $77,500 interest and payoff in 21.6
years
*Will pay add'l $2,520 more PMI over 84 payments
to get balance down under $124K
*Balance 10 years from now $103,600
*Balance 20 years from now $17,200


You really have to determine how long you are going to stay and if you are going to still pay $956 each month even if you refi. You could save up to about $47k in interest over the next 21+ years, plus you would pay it off 3.5 years earlier than your current mortgage.

If you plan on staying 10 more years but only pay the minimum new payment of $790 then your balance will be higher 10 years from now. Plus you would be paying for an extra 3 years on the mortgage if only paying $790 month.

Definitely worth it IMO if you plan on paying $956 each month on new mortgage. But once again my figures are estimates and could be off a little bit here and there, but it should give you a good general picture.






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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
6093 posts

re: Should I refinance with these numbers?


quote:

Look at the savings with single payment PMI


+1. This alone can save you couple hundred a month.






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lsursb
LSU Fan
Baton Rouge
Member since Jan 2004
5584 posts

re: Should I refinance with these numbers?


Thanks mglsu21! I appreciate the information, that's helpful to see it laid out that way.





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Crimsonsaint24
Alabama Fan
Alabama
Member since Jul 2011
549 posts

re: Should I refinance with these numbers?


I just recently refinanced mine I also had 5.25% I currently have 3.8% on a 20 year mortgage now





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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
534 posts

re: Should I refinance with these numbers?


No problem at all. About to buy a house myself and it is somewhat helpful for me to run some numbers for myself.





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tiger94gop
LSU Fan
GEISMAR
Member since Nov 2004
1676 posts

re: Should I refinance with these numbers?


Why is your PMI increasing. Did you lose value and reduce your principal any? If you are increasing your loan amount because of the fees. You need to go to a broker who will try to send you through FNMA. PMI premiums are more expensive than they were 3 years ago, but you should be able to get a lower rate and the PMI premiums are less for FNMA than FHA. Email me if you want a quote. You can do it multiple ways, but it looks like you could be lower. It will really depend on the appraisal.





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