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How to determine if I should look in to refinancing home?
Posted on 3/31/20 at 8:14 pm
Posted on 3/31/20 at 8:14 pm
The mortgage interest rates thread got me wondering if I should refinance my home. Purchased in 2014 and owe $367k on it. Worth $500k. Rate is 3.75%. It seems like people are getting lower than that. Is there a generally recommended calculator or general rule on when to refinance?
5
Posted on 3/31/20 at 8:19 pm to BeerMoney
You missed the boat. Probably not worth it unless you move to a 15 yr loan. But you can always reach out to a lender and see what they can come up with for you.
Posted on 3/31/20 at 8:24 pm to LSUSUPERSTAR
Well good to know. Thanks. I just stumbled upon that thread. Was looking in to if any conversation was going on around the small business "Paycheck Protection Program" was going on and got sidetracked.
Posted on 3/31/20 at 8:58 pm to BeerMoney
First of all that is a pretty good rate.
Second, don’t listen to people that say you missed the boat.
Find a lender you want to work with, get them your information and keep it up to date. 3% will come again in short order but you have to be ready when it dips.
Second, don’t listen to people that say you missed the boat.
Find a lender you want to work with, get them your information and keep it up to date. 3% will come again in short order but you have to be ready when it dips.
Posted on 3/31/20 at 9:07 pm to BeerMoney
The rule of thumb I’ve heard is that you want to go down at least 1% for it to be worth the closing costs.
For example, my current rate is 4.875 and I’m locked in at 3.125 now. Just waiting to close. Definitely worth the cost, but I had a lot more fat to trim off than you do.
I agree with the above poster. Realize you have a good rate already. Then, talk with a mortgage broker who can shop around and tell them what percent you are looking to lock in at. Then be patient. With current market conditions the rates will have to come down again.
For example, my current rate is 4.875 and I’m locked in at 3.125 now. Just waiting to close. Definitely worth the cost, but I had a lot more fat to trim off than you do.
I agree with the above poster. Realize you have a good rate already. Then, talk with a mortgage broker who can shop around and tell them what percent you are looking to lock in at. Then be patient. With current market conditions the rates will have to come down again.
Posted on 3/31/20 at 9:15 pm to Mr.Perfect
Any recommendations on lenders in Baton Rouge area?
Posted on 3/31/20 at 9:23 pm to Mr.Perfect
quote:
3% will come again in short order but you have to be ready when it dips.
Hoping so, I have my paperwork ready to pounce but my friends in the mortgage industry don’t think rates are going that low again.
Posted on 3/31/20 at 10:01 pm to SaintTiger80
I'm just like Saint..... had a 30yr @ 4.8 (11 yrs into it) refi'd to a 15yr @ 3.0. Expected a similar monthly payt but it went up by about $400 a month. I know I shaved 4 yrs off but.... Ouch
Posted on 3/31/20 at 10:16 pm to 3D
quote:
I'm just like Saint..... had a 30yr @ 4.8 (11 yrs into it) refi'd to a 15yr @ 3.0.
never understood why people do this, you can just make extra payments on the 30 and have optionality to always go back to the minimum payments
Posted on 3/31/20 at 10:45 pm to BeerMoney
My local bank is advertising 2.75% 15 and 3.125 30
Posted on 3/31/20 at 11:08 pm to barry
quote:
never understood why people do this, you can just make extra payments on the 30 and have optionality to always go back to the minimum payments
Because paying extra sounds good on paper to most as they’re signing paperwork. Most will never pay a penny extra.
Posted on 4/1/20 at 12:00 am to GeauxGutsy
I did it because so much more goes towards the principle without having to send the extra.
Posted on 4/1/20 at 7:50 am to BeerMoney
I just refinanced a 3.625% to a 2.5% 15 yr. will save over 30k in interest with not much change in payment. I’m not in a rush to payoff house but I couldn’t pass it up with that savings. It’ll take a year and a half to makeup the closing costs. I’d look at refinancing if you could make up the costs within 3 or so years and plan on staying in the house long term. Even if I paid more toward my higher rate mortgage I would still have been paying more interest.
Posted on 4/1/20 at 8:09 am to GeauxGutsy
This. Exactly this. I had that mentality on my first home and managed about a year of doubling the principal before I just let it ride. I'll be buying here soon and I'm just going to bite the bullet and lay the extra $500 or so per month on a 15 year.
Posted on 4/1/20 at 7:32 pm to PorkSammich
quote:
but my friends in the mortgage industry don’t think rates are going that low again.
Been said repeatedly for years but they keep getting there in cycles. I frankly wouldn’t trust someone who said that.
Posted on 4/1/20 at 7:37 pm to SaintTiger80
quote:
The rule of thumb I’ve heard is that you want to go down at least 1% for it to be worth the closing costs.
You can always roll the closing costs into the low. A lot depends upon how long you reasonably anticipate staying in the home as well. I know there is no magic, crystal ball, but the longer you're in the house...the better to refi.
Also, shy away from the 15-year mortgages. Mortgages are good for tax purposes and free up that money to invest. At the end of the day, good times and bad, I'd rather my money be invested in the stock market than tied up in a house. My two cents.
This post was edited on 4/1/20 at 7:38 pm
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