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Message
Should I refinance with these numbers?
Posted on 2/22/13 at 8:48 am
Posted on 2/22/13 at 8:48 am
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?
5
Posted on 2/22/13 at 9:01 am to lsursb
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.
Posted on 2/22/13 at 9:05 am to lsursb
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.
Posted on 2/22/13 at 9:14 am to Catman88
The PMI has increased, about $30 a month over what I am paying now, but that still results in about $130 a month saving.
Posted on 2/22/13 at 9:23 am to lsursb
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.
Were you in the military? I am surprised at how many vets do not have va loans.
Posted on 2/22/13 at 10:11 am to lsursb
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?
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 2/22/13 at 10:12 am
Posted on 2/22/13 at 10:22 am to mglsu21
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.
These are just preliminary figures, based on the information they had from my original purchase of the house.
Posted on 2/22/13 at 10:25 am to lsursb
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.
They only charge $995 for their fee.
Posted on 2/22/13 at 10:59 am to lsursb
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.
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.
Posted on 2/22/13 at 11:23 am to novabill
quote:
Look at the savings with single payment PMI
+1. This alone can save you couple hundred a month.
Posted on 2/22/13 at 11:36 am to mglsu21
Thanks mglsu21! I appreciate the information, that's helpful to see it laid out that way.
Posted on 2/22/13 at 12:36 pm to lsursb
I just recently refinanced mine I also had 5.25% I currently have 3.8% on a 20 year mortgage now
Posted on 2/23/13 at 9:59 am to lsursb
No problem at all. About to buy a house myself and it is somewhat helpful for me to run some numbers for myself. 
Posted on 2/23/13 at 6:41 pm to mglsu21
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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