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Will Cover 
Nebraska Fan
Colorado
Member since Mar 2007
22442 posts
| Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/27/12 at 10:45 pm)
Current Interest Rate: 4.25000%
Principal Balance: $249,365.61
15 year loan, about 13 years and 10 months left.
House is appraised for $334,000 and I have $0 debt, except for my house.
Below is the quote I believe I can and should qualify for.
Is there any reason why I shouldn't pull the trigger on this?
I'd stand to "save" $234 per month, which I would just apply extra to principal every month on my new loan.
Am I missing any hidden cost?
This post was edited on 5/9 at 12:33 pm
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ds1tiger 
LSU Fan
Closer than you think
Member since Apr 2006
203 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/27/12 at 11:08 pm to Will Cover)
A couple of things.... First, this doesn't appear to be an actual offer. This is a teaser to get you to "contact the lender." Second, they only list the lender fees. There will be title costs, probably an appraisal fee, and possibly points depending on where rates actually are when you apply for the loan.
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guttata
LSU Fan
prairieville
Member since Feb 2006
18232 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/27/12 at 11:50 pm to ds1tiger)
I would definitely agree that you would have to pay points to get a rate that low.
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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
17390 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 6:49 am to Will Cover)
quote:
Am I missing any hidden cost?
get a good faith estimate from them, but yes rates are extremely low right now.
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cjared036 
Alabama Fan
Houston, tx
Member since Dec 2009
3856 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 10:27 am to C)
rates are low and you stand to benefit.
crap online will twist you around though. They will pressure you to allow them to run your credit, then will pull the switch on you and state that becuase your credit is not 850 your rate is now 3.125%. Or say that 2.875% is with a perfect profile(low LTV, credit) and with you paying a point.
Just refinanced mine with Wells Fargo,
If you dont want to pay any points, have good credit, and a sub 80%LTV, consider 3.125% on a 15 year a deal.
If your loan amount is not $400k plus then paying a point on a 15 year, when you intend to pay extra on the note, is rather useless. the term is already queezed and whatever you pay to buy the point down will have less opportunity to recoup. THis is especially true if you plan to sell the house in 5 or so years.
Do the amortization tables on you options. Not too hard to see what I am talking about.
This post was edited on 4/28 at 10:28 am
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Will Cover
Nebraska Fan
Colorado
Member since Mar 2007
22442 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 1:52 pm to ds1tiger)
Update.
I spoke with New Penn Financial and asked him what competitive advantages does his company provide over the next lender.
1. Reasonable fees, being flat rate.
2. Direct contact with loan officer. Simply deal with one person.
3. Size. Even though they did $111 million in loans last month, they are able to move quickly. Average time for a loan to close is 2 to 3 weeks.
Lock period is standard 30 days, but can be extended to 45 days at no additional cost.
For 15 year loan, standard rules apply. No prepayment penalties, no points, no buy-downs.
Rate, right now, based upon credit worthiness, LTV and how much I plan to borrow is at 2.99 %.
He estimated that my total out of pocket expenses will be $995 for flat rate to New Penn + $3500 in closing costs.
A rated with the Better Business Bureau and they are based out of Pennsylvania.
Anything else I need to be leery of?
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Grassy1
alligator bayou
Member since Oct 2009
1321 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 3:23 pm to Will Cover)
I did the same thing, Will...
but, before I pulled the trigger I contacted Regions, who held my current mortgage and gave them a shot. It wasn't a huge difference but ended up being costing about $500 less than the next bid.
And of course, they had most of the info on us already.
Good luck.
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foshizzle
LSU Fan
Member since Mar 2008
25061 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 4:12 pm to Will Cover)
Will, I would also take a look at a 30. The reason why is that having a higher payment means your return on the extra money is only 2.2% after tax. That's pretty damn poor. It happens that I ran the numbers myself last week under the following assumptions:
1) 30 year mortgage at 4%
2) 15 year mortgage at 3%
For both I assumed that I had a monthly amount to invest equal to the monthly payment of the 15 year note. For the 30 year mortgage that meant I invested the difference for 30 years. For the 15 year mortgage that meant I simply paid the mortgage for 15, then invested the whole thing for 15 more.
Under most circumstances the 30 year was slightly (but only slightly) better. The only time the 15 was demonstrably better was assuming investment returns are 3% (after taxes) or less for the next 30 years. If over 8% the 30 year was clearly better.
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Will Cover
Nebraska Fan
Colorado
Member since Mar 2007
22442 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 4:44 pm to foshizzle)
Great suggestion, but I have to be real honest here and say I don't know if I would treat the 30 year loan as a 15 year loan. I'm sure, like most, I would find another way to spend that money. Many people have great intentions, but often lose sight, focus and get off track of their goal(s).
The best thing for me is that after 15 years, I won't have a house payment. And for me, that gives me a greater peace of mind.
This post was edited on 4/28 at 4:45 pm
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Will Cover
Nebraska Fan
Colorado
Member since Mar 2007
22442 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 4:45 pm to Grassy1)
quote:
I did the same thing, Will...
but, before I pulled the trigger I contacted Regions, who held my current mortgage and gave them a shot.
My mortgage is through CitiMortgage. It might be worth a shot to see what they can do.
All they can do is say no.
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foshizzle
LSU Fan
Member since Mar 2008
25061 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 5:16 pm to Will Cover)
Fair enough, my analysis explicitly assumes investing the difference. 
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Bayou Tiger
LSU Fan
The Woodlands, TX
Member since Nov 2003
2924 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 5:34 pm to Will Cover)
You should consider a 30-year loan, and just pay it like a 15-year loan. That way, if your income stream is disrupted you have some flexibility. Not to get into your business, I just think that way as the sole earner in a two-kid family and working in a volatile industry.
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Dead Mike
LSU Fan
Cell Block 4
Member since Mar 2010
1500 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/28/12 at 9:46 pm to Bayou Tiger)
I don't mean to take this too far on a tangent, but I figure I'll ask here rather than start a new thread. Anyway, what's the best way to get an appraisal on a home, if not necessarily intended for impending resale?
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ds1tiger
LSU Fan
Closer than you think
Member since Apr 2006
203 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/29/12 at 8:18 am to Dead Mike)
You can call an appraiser yourself if you want one done. Keep in mind though that this report can't be used by a lender if you are considering refinancing.
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foshizzle
LSU Fan
Member since Mar 2008
25061 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/29/12 at 11:09 am to Bayou Tiger)
quote:
You should consider a 30-year loan, and just pay it like a 15-year loan. That way, if your income stream is disrupted you have some flexibility
For that purpose an interest-only option costs less of an interest rate spread.
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hawkeye007
LSU Fan
greenwell springs
Member since Feb 2010
1231 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 4/30/12 at 12:06 pm to Will Cover)
You can probally get a better quote then what CITI will do for you. I had an existing customer get a quote from CITI and it was higher than the quote i provided. the big lenders do not refinance as much as their portfolio as you would think.
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Will Cover
Nebraska Fan
Colorado
Member since Mar 2007
22442 posts
| re: Re-financing my existing mortgage. What am I missing here? UPDATED. (Posted on 5/9/12 at 12:36 pm to hawkeye007)
Update.
I'm in the process right now of working with New Penn Financial. My mortgage loan consultant has been great to work with. Very responsive to e-mail and phone communication.
Just locked in my new rate. 2.875 % for 15 years, no points, no buy-in, etc. - 30 day lock, but will extend to 45 day if no difference.
Thus far, no surprise charges and everything has been straight-forward.
This post was edited on 5/9 at 12:37 pm
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