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Started By
Message
Refinancing a Mortgage after first year
Posted on 9/30/24 at 9:47 am
Posted on 9/30/24 at 9:47 am
My mortgage company says I can refinance my mortgage at no cost and with a lower interest rate. I checked the disclosure and it is at no cost.
It doesn't make sense to me that they will refinance at no cost and also charge me less interest. They view is that they want to retain me with a no cost refinance at a lower interest rate so I font leave them, but what say you guys?
We're talking $300 less per month on the note. I guess I would be starting over again at paying almost pure interest per month, but could push that savings towards a bigger pure principle payment.
It doesn't make sense to me that they will refinance at no cost and also charge me less interest. They view is that they want to retain me with a no cost refinance at a lower interest rate so I font leave them, but what say you guys?
We're talking $300 less per month on the note. I guess I would be starting over again at paying almost pure interest per month, but could push that savings towards a bigger pure principle payment.
13
Posted on 9/30/24 at 10:00 am to SmogkDeizKnutz
I financed through RocketMortgage and they had the same offer. Seems like a couple of finance companies before offered the same thing.
I think they're getting the refinance at a lower cost to borrow to them, so they're not losing money on your note. Someone smarter than I would have to validate.
I think they're getting the refinance at a lower cost to borrow to them, so they're not losing money on your note. Someone smarter than I would have to validate.
Posted on 9/30/24 at 10:00 am to SmogkDeizKnutz
quote:
We're talking $300 less per month on the note. I guess I would be starting over again at paying almost pure interest per month, but could push that savings towards a bigger pure principle payment.
Ask them to run the numbers if you recast it with the same number of remaining payments, as opposed to a fresh 360?
Posted on 9/30/24 at 10:02 am to SmogkDeizKnutz
quote:
can refinance my mortgage at no cost
There is zwro chance this can happen
Posted on 9/30/24 at 11:27 am to Ace Midnight
quote:
Ask them to run the numbers if you recast it with the same number of remaining payments, as opposed to a fresh 360?
Good point here.
Posted on 9/30/24 at 11:33 am to SmogkDeizKnutz
Probably trying to avoid losing a lot of clients to refinances at other companies
Posted on 9/30/24 at 11:46 am to Upperdecker
quote:
Probably trying to avoid losing a lot of clients to refinances at other companies
That’s exactly what they’re doing
Posted on 9/30/24 at 12:22 pm to SmogkDeizKnutz
Watch to make sure the "free" refinance doesn't get added to your mortgage balance or additional payments at the end of the loan.
Posted on 9/30/24 at 12:51 pm to SmogkDeizKnutz
quote:
I can refinance my mortgage at no cost
Seems odd due to the amount of time, people, paperwork involved in this.
My Mortgage Company told me I could refi once at 1/2 price, I think it will be about $9,000.
I'm waiting to see what happens after the election.
Posted on 9/30/24 at 2:42 pm to SmogkDeizKnutz
I apologize, the term escapes me, but I did the same with my Navy Federal Credit Union mortgage twice during its lifetime. There was an associated fee, but it was less than $500 both times and there were no other 'closing costs' (appraisal, survey, attorney, etc). My son is closing on a townhouse withe NFCU, going with a 5.25 5yr ARM. They said, and we have it writing, that after 12 months of payments made on time, he can refinance which includes moving to a 30 or 15 yr fixed-rate mortgage. Lot of flexibility out there, just have to look for it.
Posted on 9/30/24 at 2:48 pm to HC87
quote:
I apologize, the term escapes me,
recast?
Posted on 9/30/24 at 3:18 pm to SmogkDeizKnutz
They make money by re-upping you to 30 years. You are now at 29, they get you in a new 30 year loan and they collect interest for an extra year. It may not seem like much, but the number crunchers got this all figured out.
Posted on 9/30/24 at 3:21 pm to SDVTiger
You have to love the downvotes when its not possible to zero costs onna refi 
Posted on 9/30/24 at 5:09 pm to SmogkDeizKnutz
There are always closing costs associated with a refi, so I would be wary of their "no cost" offer. Make very certain what this means and that the bank is paying out of pocket all closing costs and not just rolling into the mortgage. At the least there will be appraisal fees, title insurance premiums, recording the new mortgage fees, etc. Somebody's paying for these.
Posted on 9/30/24 at 6:23 pm to SmogkDeizKnutz
On a $500,000 mortgage at 5% for 30 years, you would pay just under $25,000 in interest in that first year. You would have only reduced the principal by $7000. This works in their favor probably when the numbers are ran.
Posted on 9/30/24 at 8:47 pm to SDVTiger
I’m laughing my arse off. Refinancings cost more money for originatiors and make less revenue 
This is desperation to close deals today
This is desperation to close deals today
This post was edited on 9/30/24 at 8:53 pm
Posted on 10/1/24 at 12:28 pm to SmogkDeizKnutz
Banks do this so that you won't refinance with another bank...I have had this done twice over the years.
Most recently, back in mid-2020, the interest rate changed but the term stayed the same.
Most recently, back in mid-2020, the interest rate changed but the term stayed the same.
This post was edited on 10/1/24 at 12:31 pm
Posted on 10/1/24 at 1:28 pm to SmogkDeizKnutz
Oh, so where is the cost for title insurance going? Property taxes? Etc? $4k in title insurance on a house that didn’t exist before I paid the builder to build it was awesome when I refinanced.
Posted on 10/1/24 at 2:10 pm to SDVTiger
quote:
There is zwro chance this can happen
False, I had a lender give me a refinance offer before with no cost to me. It was for a 2 point lower rate and all I did was sign the paperwork. I paid absolutely nothing out of pocket. The bank ate the closing costs, and I didn't reset my term.
This post was edited on 10/1/24 at 2:12 pm
Posted on 10/1/24 at 3:40 pm to SG_Geaux
quote:
False, I had a lender give me a refinance offer before with no cost to me. It was for a 2 point lower rate and all I did was sign the paperwork. I paid absolutely nothing out of pocket. The bank ate the closing costs, and I didn't reset my term.
All that happened was they gave you a higher rate than you qualified for and use that to pay the costs
But if you were happy its all that matters
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