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Message
UPDATE Contacted today about refinancing my home from my Mortgage Company
Posted on 3/26/15 at 2:48 pm
Posted on 3/26/15 at 2:48 pm
I currently have a FHA loan with and interest rate of 4.375% approximately $167,681 left to pay off in a home I have been in for less than 2 years. My mortgage company contacted me today offering to lower my interest rate to 3.625% and refinance at $172k, no closing costs.
I ran the numbers through a mortgage calculator and with my current interest rate I am paying $857.43 in principal & interest. Over the rest of the life of the loan with the current interest rate and remaining principal I would pay $308,674 in total cost of mortgage.
With the new quoted interest rate of 3.625% I would have payed $282,387 in total cost of mortgage according to the mortgage calculator I found. My monthly payment for P&I would be around $784 compared to $857 I am currently paying.
I admittedly do not know much about mortgage's and have not considered refinancing before being contacted today. Is this something I should pursue? According to the numbers I have in front of me I am saving over $20k over the life of the loan. Am I missing something?
I ran the numbers through a mortgage calculator and with my current interest rate I am paying $857.43 in principal & interest. Over the rest of the life of the loan with the current interest rate and remaining principal I would pay $308,674 in total cost of mortgage.
With the new quoted interest rate of 3.625% I would have payed $282,387 in total cost of mortgage according to the mortgage calculator I found. My monthly payment for P&I would be around $784 compared to $857 I am currently paying.
I admittedly do not know much about mortgage's and have not considered refinancing before being contacted today. Is this something I should pursue? According to the numbers I have in front of me I am saving over $20k over the life of the loan. Am I missing something?
This post was edited on 3/27/15 at 1:11 pm
7
Posted on 3/26/15 at 3:28 pm to burgeman
I would not say there are no closing costs. Rather, there are no upfront closing costs you have to pay... the closing costs are rolled into the new loan (i.e. that's why the refinance balance is higher).
So you will save 73/month and it would take you 59 months in savings to pay the rolled-in closing costs.
So you will save 73/month and it would take you 59 months in savings to pay the rolled-in closing costs.
Posted on 3/26/15 at 3:34 pm to LSUFanHouston
Well yea, I should have worded that better, so not a good idea?
Posted on 3/26/15 at 3:38 pm to burgeman
It all depends on how long you live in the house. In order for it to be a good deal for you, you need to stay in the house long enough for the $73/month you are saving to overcome the increase in principal of the loan (these are really closing costs rolled into the loan).
If you stayed for 30 years, you will save $20K or so by doing the refi, but if you sell in 2 years, you are better of staying with what you have.
If you stayed for 30 years, you will save $20K or so by doing the refi, but if you sell in 2 years, you are better of staying with what you have.
Posted on 3/26/15 at 3:52 pm to burgeman
quote:
$167,681 left to pay off in a home I have been in for less than 2 years. My mortgage company contacted me today offering to lower my interest rate to 3.625% and refinance at $172k, no closing costs.
Thats 4300 in closing cost, you can find a much better deal. I was able to Refi my FHA and my breakeven point was 9 months so it was a no brainer, paid 2600 in closing cost.
Posted on 3/26/15 at 4:02 pm to barry
Hmm may have to check around then, I wasn't even thinking about this before being contacted today. Also I am paying pmi right now, $189/month it would drop to $120/month after refinance.
Posted on 3/26/15 at 4:03 pm to burgeman
Seems like teh answer is go shop around, find the best deal then come back and discuss
This post was edited on 3/26/15 at 4:04 pm
Posted on 3/26/15 at 4:07 pm to burgeman
I was in a similar situation where I had a 4.375% loan a couple years old and I refinanced last month at 2.875%. I did get that rate by having good credit and moving down to a 15 year loan, but I decided it was worth it for the severe change in rate.
I had 156k left on the loan and now I have 159k but it also included a months payment that I didn't have to pay so basically $1300 of the extra amount was for the month of the loan that I never had to pay. I also got a check back from my old mortgage company for the remaining balance of my insurance and taxes which was for like 600 or 700 bucks.
I had 156k left on the loan and now I have 159k but it also included a months payment that I didn't have to pay so basically $1300 of the extra amount was for the month of the loan that I never had to pay. I also got a check back from my old mortgage company for the remaining balance of my insurance and taxes which was for like 600 or 700 bucks.
This post was edited on 3/26/15 at 4:09 pm
Posted on 3/26/15 at 4:34 pm to SouthOfSouth
I am looking into that now, seems like 15/yr would only be about about $300 more a month at 3.299% from GMFS
Really I would like to get rid of PMI as well
Really I would like to get rid of PMI as well
This post was edited on 3/26/15 at 4:43 pm
Posted on 3/27/15 at 1:15 pm to burgeman
Checked around got quoted 3.5% on a 30yr and 2.875% on a 15yr. Now I can either save about $150 a month on a house note with the 30 or pay off the house faster, build equity and save about $80k compared to what I currently have.
Posted on 3/28/15 at 8:56 am to burgeman
Yes refi now
You also get your MIP down from 1.35% to .8%
Streamline that loan with no appraisal needed
You also get your MIP down from 1.35% to .8%
Streamline that loan with no appraisal needed
Posted on 3/28/15 at 12:50 pm to burgeman
Where did you get 3.5% at?
I need to do this as well.
I need to do this as well.
Posted on 3/29/15 at 10:03 am to kengel2
GMFS in BR, so no appraisal is needed with the FHA streamline?
Posted on 3/29/15 at 7:48 pm to burgeman
No income or appraisal needed
Posted on 3/29/15 at 8:21 pm to burgeman
When did you originally finance? Was it before the PMI change to life of the loan?
IIRC correctly the change was in April 2013. If you don't plan on being in your home for a long period, it would not matter.
IIRC correctly the change was in April 2013. If you don't plan on being in your home for a long period, it would not matter.
Posted on 3/30/15 at 12:38 am to Blakely Bimbo
I wouldn't look into refinancing to FHA from FHA. You should ask him what he offers for a 95% LTV conventional. If your house appraises for $181,000 then you can get into that. Your PMI can drop down to .52 (FHA is .85)depending on credit score. You will also pay a another 1.75% MIP that is rolled into your loan. Your interest rate will be 3.875/4%, however your APR will be lower. FHA MI is for the life of loan, while conventional PMI may only be in place a few more years and you can request it be removed
Posted on 4/2/15 at 5:01 pm to SomethingLikeA
Damn house appraised for less than what it appraised for 2 years ago. So now we don't have enough equity in it to do 15 year, may end up with 30 yr at 3.875%, would drop our payments down to $1161. Kinda disappointing what our house is worth less because of non-renovated houses selling in the neighborhood.
Posted on 4/2/15 at 5:05 pm to burgeman
quote:
approximately $167,681 left to pay off in a home
quote:
refinance at $172k
If there are "no closing costs" are they given you the difference from equity? If those are closing costs rolled into the loan, that seems a little high.
Posted on 4/2/15 at 5:07 pm to WPBTiger
They rolled closing into it
Posted on 4/2/15 at 7:20 pm to burgeman
Burgeman,
Where are you located? Purely informational.
Where are you located? Purely informational.
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