home owners - refinance?

[hoey222]

has anyone refinanced their mortgage?


was it easy - a biatch??

anything to look out for?


the rates are too good to pass up.

i could save a full percentage point right now.



thanks:D

[Tag]

Depending upon you individal situation refinancing is usually a good thing. I have refinanced a few times in the past year or so.

If you have excellent credit and have a good relationship with a mortgage broker you should be able to get a true "no-cost" refinance.

There are many mortgage people out there today > many are good and honest, many are not. Look at the fees charged VERY VERY carefully.

Know what you are paying for ( upfront and/or burried into the new note )

If you do not completely understand the transaction seek a trusted advisor. ( and that goes for any large financial decision )

Hope this helps.

[attgig]

haha, i was just talking with brainsmile yesterday about this..

yo brainsmile....need some more advice in here..

[ray]

http://www.bankrate.com/brm/default.asp

[johnnymk]

If I recall, it is advantageous to refinance if the difference between your existing rate and your new rate is 2% or more, but I forget the reasoning.
I know that my sister called the mortgage company several years ago and threatened to refinance with another bank and they immediately gave her a 1/2% reduction. It only cost her about a hundred bucks for transaction fees.

[CornMonkey]

i feel a bit out of the loop. i'm not a homeowner(yet) so i don't know much about refinancing. what is so advantageous about doing it? what exactly IS refinancing anyways?

[dbax791]

Originally posted by hoey222
has anyone refinanced their mortgage?


was it easy - a biatch??

anything to look out for?


the rates are too good to pass up.

i could save a full percentage point right now.

thanks:D

I've done it twice...once to save 1/2 point, the next to save 1 1/2 points. In both cases, the rates dropped so low, that I did no-costs in both cases. I paid a little higher than the lowest rate, but they just baked in the fees into the principal amount.

Its saving me about $175/mo over what I was paying.

It's less of a pain than when you first bought the house. They aren't nearly as critical of credit history (since you have a payment history and a house as collateral) and you don't need a down payment.

It probably took about 30-45 mins to apply for the refi. Another 30-45 for the dude to measure and re-appraise the house. And about 60-90 mins in the title office...and BAM! Free money!

But it makes less sense the longer you've been in the house. The downside on say a 30 year mortgage is that your payoff is now becomes 30 years from when you do the refi, instead of 25 years or whatever you have left. Which didn't matter to me since my mortgage still had 27 yrs to go, and I plan to pay it off sooner someday anyway.

Good luck!

[sourdough]

I refinanced my little bakery twice through my cousin (Wheat Bread) and he was able to get our second rolled into our first thanks to the good real estate market in my area and the low rates. This cut our payments by about $450 a month over what we were paying before. That's helping us big-time while we plan our kitchen remodel (including a new oven :) ).

[hoey222]

some of you have mentioned a "NO COST" refinance. what do you mean by no cost??

[brainsmile]

Originally posted by hoey222
some of you have mentioned a "NO COST" refinance. what do you mean by no cost??

any costs are factored into the rate... for instance you'll have to pay maybe 1/4 or 1/8 more than you could get if you got a no point refi rate. But that's ok if you plan to keep refinancing. You don't want to pay out of pocket costs. Keep your money... ride the rates down until the rates you feel are the lowest. If at some point you decide that's it... no more refinancing for a while... then you have to consider what's the best rate available... that might mean you'll have to pay some money at that point.

Each time you refinance there is the potential for "costs". That eats into your potential savings from each move.

[dbax791]

Originally posted by hoey222
some of you have mentioned a "NO COST" refinance. what do you mean by no cost??

There are 2 types of potential costs. The first are "points" or "origination fees". Don't be misled, they are essentially the same thing. They allow you to "buy" a lower interest rate. For example, I could do a no-cost refinance at 5.75, or I could pay say $1000 out-of-pocket up-front and get it a 5.5 rate.

The second type of cost is "closing costs"...this is all the BS fees you have to pay to close the mortgage. Appraisal, title search, filing fees, courier fees, credit checks, and about 50 other bs charges.

A no-cost finance is basically just a loan against that. So if you need to finance a $100,000 mortgage, you could either finance the $100,000 at 5.5%, and write a check for $2000 cash to cover a $1000 origination fee + $1000 closing costs.

Or you could choose to "bake" the costs in the mortgage...instead you would finance $102,000 at 5.75% and pay nothing out of your pocket now.

The decision basically is what do you want to do with the $2000? If you think of it in reverse, by paying points and costs up front is sort of equivalent to buying a 30-year CD at 4% (b/c mortgage interest is tax deductable, the equivalent "real rate" is less).

If you think that rates will go lower, pay the costs up front. If you think you can earn more than 4% on your money over the long term consider a no-cost.

[Markel]

Originally posted by johnnymk
If I recall, it is advantageous to refinance if the difference between your existing rate and your new rate is 2% or more, but I forget the reasoning.
I know that my sister called the mortgage company several years ago and threatened to refinance with another bank and they immediately gave her a 1/2% reduction. It only cost her about a hundred bucks for transaction fees.
The "2% rule" was put in place when most mortgages were in the 80K range. With today's mortgage rates, it can often be advantageous to refinance if the difference is 1% (or even less). I just heard a discussion on the radio today where the "expert" suggested that a good rule of thumb is that the reduced payments should recover the cost of the refinancing in 18 months.

[brainsmile]

Yup...wife and I just put down money for house #3. San Diego is crazy... in less than a month the value of the house has already jumped 25,000 dollars

[hoey222]

ya we're looking at saving 1.2% on our interest rate. we have a home equity loan, but if we get it reappraised, we could roll the home eq loan into the total and STILL save money. we could eliminate the cost of the home eq payment, AND lower our mortgage payment.


thanks for the advice :D

[Joshua]

Yup.. I just closed on my 2nd refi in 2 years a couple of weeks back.

I'm not on a 7 yr ARM @4.75 with my intention being to pay off the loan within that 7 years.

[topane]

Last year we refinanced our mortgage. We lowered our rate .75% and went from a 30 to a 20-year mortgage. We were 3 years in, so it was like cutting off 7 years plus interest savings, etc. We're kicking around the idea of doing it again and going to a 15-year.

[attgig]

Originally posted by topane
Last year we refinanced our mortgage. We lowered our rate .75% and went from a 30 to a 20-year mortgage. We were 3 years in, so it was like cutting off 7 years plus interest savings, etc. We're kicking around the idea of doing it again and going to a 15-year.

I'm thinking going longer..
how much were closing costs on changing the term?

[brainsmile]

didn't I answer this question for you ATT?

[attgig]

Originally posted by brainsmile
didn't I answer this question for you ATT?

you said something like probably not, and then a different friend of mine told me they'll probably they will... so i'm seeking a 3rd opinion. of course I could just ask my mortgage company...but.... :P

[brainsmile]

just send me the deed to your house... we'll go from there

[WhiskeyPapa]

I just refinanced - 15 years at 4.75% interest. I did have to pay 1% origination to get that rate, but we plan on being in this house forever, so that's ok.


Originally posted by hoey222
was it easy - a biatch??

anything to look out for?It's usually easy. This time around I just called the bank, signed some papers, waited 3 weeks, signed some more papers and that was it. When I efinanced 18 months ago, it really sucked. It took 110 days to complete and I was on the phone all the time trying to get some help. I suggest going somewhere local where you can actually talk to a person face-to-face.

When you get quotes for rates, be sure to ask for the rate with no points and no origination. That's so you can compare apples-to-apples. If you end up paying origination, that's fine, but you want to be able to compare rates and closing costs.

When they give you the "good faith estimate" of closing costs, immediately count on paying $1,000 more. That way, if you only have to pay $500 more, you feel like you got a deal!


Originally posted by CornMonkey
what is so advantageous about doing it? what exactly IS refinancing anyways? It's advantageous because you get a lower interest rate which will either allow you to pay less per month, or get a shorter term (and therefore pay it off faster.)

Refinancing is basically getting a loan from Bank A to pay off your mortgage at Bank B. You're just moving your loan to another bank or lender. You can also refinance at the same bank, so you're just getting a new loan to pay off the old loan, but at a better rate or term.