refinance after 3 years ?

[renovation]

this is not me so you don't get the wrong idea.
a friend of mine is talking about refinancing his home. he has only had the loan for 3 years. he thinks he maybe able to save $100 a month thats great.
but what has happen around here in the past 3 years is. the value of homes has drop. he left his job and only his wife is bring in a pay check.
the wife and I think he dreaming if this is going to fly.
I was like shocked when he said something the other day when he stop in. then that night he said it again in front of my wife.
i think good luck to him. but even when times are /were good my thought was three years. was not a long enough time to refinance a home in most cases and come out ahead in the long or short end.
thoughts please!

[Chgoman]

It all comes down to the numbers. In order to refinance the wife's income will need to be enough for qualifying and they need to still have enough equity in the home.

As far as whether it makes sense, in most areas a refi will cost around $2700 in closing costs so if they are saving $100 per month it would take just over 2 years to make up the closing costs. They'll have to decide if thay will stay longer than 2 years and whether it's worth it to them.

The first thing they should do is call their current lender and ask if they have any no or low cost refinance options. Some banks are offering these kind of deals with some of them even offering no appraisal options which can be really nice right now.

[attgig]

yup. run the numbers. can't just say it's going to or not going to work.

and if he doesn't have a job, and has free time, why not. just go for it, and if they say no, they say no.

[Prngr44]

Closed on the refinancing of my house this week.

Went from a 30yr fixed to a 20yr fixed @ 3.75% (I've been in my house for 3 years now) and my payment STILL went down.

I'm saving ~200/month with the refi that I plan to stick into the kids' accounts every month.

[Chgoman]

That's great! I went from a 30 year @4.375 to a 20 year @ 3.875 about a year ago. My payment went up by about $180 a month, but the loan will pay off 8 years faster so no complaints from me!

People who can swing a 15 year can even get down to 3.25% around now. Pretty crazy.

[Prngr44]

That's great! I went from a 30 year @4.375 to a 20 year @ 3.875 about a year ago. My payment went up by about $180 a month, but the loan will pay off 8 years faster so no complaints from me!

People who can swing a 15 year can even get down to 3.25% around now. Pretty crazy.

I almost did that. I'd rather fund the kids' accounts now versus paying the house off 5 years earlier. I'm hoping they make more than 3.75% over those years otherwise it'd be a bad move.

[Prngr44]

I'm getting ready to do this again.

2.75 for 15 and my old appraisal's still valid. Think I should hold out for 2.5??

[cruelpupet]

I went from a 7.8ish% 5y ARM to a 4.3ish% 5y ARM recently. Even after taking a higher mortgage out im still saving butt loads.

[Napoleon54]

Yeow... 7.8, that hurts! 7.8-->4.3 is a hell of a move. Congrats!

[Napoleon54]

Mark Zuckerberg just refinanced his $6 million mortgage at 1% ARM. I don't care who the hell you talk to, that's lower than inflation. WTF is going on with banking in this country?

http://www.bloomberg.com/news/2012-0...mortgages.html

As an aside... if I lived anywhere near Zuckerberg, I'd aim bottle rockets at his pool on a daily basis.

[Napoleon54]

As an aside... if I lived anywhere near Zuckerberg, I'd aim bottle rockets at his pool on a daily basis.

I'd stick them up my ass and smear them with shit first, too. Then I could say that I shat in Zuckerberg's pool. And if he swam in it, therefore I shat on his face.

No this is not a sexual fetish, it's a friendly neighborly gesture to convey my level of disregard for the man and his company. Heh.

[cruelpupet]

Yeow... 7.8, that hurts! 7.8-->4.3 is a hell of a move. Congrats!

Cost us 15-20k but we'll recoop that in under a year. Morons at the bank we had mortgage with wanted to push us to over 8% to just roll the ARM over for another 5y paying no fees and taking no additional equity out. If we were brand new customers they would have offered us the mortgage at 4.5ish%.

They could have saved us money in fees and made more money for themselves...not sure who made their mortgage rules.

[Prngr44]

Cost us 15-20k but we'll recoop that in under a year. Morons at the bank we had mortgage with wanted to push us to over 8% to just roll the ARM over for another 5y paying no fees and taking no additional equity out. If we were brand new customers they would have offered us the mortgage at 4.5ish%.

They could have saved us money in fees and made more money for themselves...not sure who made their mortgage rules.

15-20k??? to close??

[cruelpupet]

15-20k??? to close??

yea, that includes broker fee

[Prngr44]

Holy smokes!

[cruelpupet]

That sounds high? I always was told to assume/factor in 15k+ for closing costs.

[Daedalus]

By who? Mortgage brokers? I don't know your situation, but on the surface you seem to be getting hosed with a sewage line.

There are different buckets under "settlement costs". Typical fixed costs are what you pay for things like origination, title insurance, credit check, notary, recording, etc. Other settlement costs can include interest charges (varies, depending on the day of the month you close escrow) and impound funding (which is your money, but held by the lender to pay for known expenses, such as taxes and insurance).

I am right in the middle of a refi. My fixed costs are about $2k, but the credit offered to refi is much larger than that, so the balance will go toward paying off interest and funding the impound account. Effectively I am getting paid to refi. This is for a 30yr fixed rate mortgage @ 3.75%. Total settlement costs estimated @ $6-$8k, depending on the day of the month escrow closes. I was watching rates for months, and finally pulled the trigger last week when they dropped as low as I've ever seen them.

Maybe shop around more next time.

[Prngr44]

When I refi'd into my 20 last September, I paid ~1k to close. Since my appraisal's still good, it's going to cost me ~700 this time around.

No points, no escrow.

[cruelpupet]

New appraisal, mortgage broker fee (6k on its own, I wasnt getting anywhere near his rates from the banks who would talk to me), title ins, lawyer fees, recording fees, etc. Also keep in mind this is a NYC property

[Markel]

Also keep in mind this is a NYC property

Is it also a commercial property (i.e., apartments)?

[cruelpupet]

Is it also a commercial property (i.e., apartments)?

Yes it is, but even a non commercial property in any of the 5 boroughs where realistically your mortgage will be between 300-600k Id expect a 10-20k closing cost. Im not sure why, its just always something I factor into the equation, no one ever told me to expect it.

[Prngr44]

Yes it is, but even a non commercial property in any of the 5 boroughs where realistically your mortgage will be between 300-600k Id expect a 10-20k closing cost. Im not sure why, its just always something I factor into the equation, no one ever told me to expect it.

I don't think closing costs in that range are something I've EVER expected. I'm on the low end of your scale. I also have NEVER gone through a broker because their fees have always been LOTS higher than a regular old bank. (Maybe that's how yours got so high??) Are you having to fund an escrow account too at closing? I've never had to escrow taxes and insurance. Just trying to think of some areas where your closing costs would be higher, but like Daedalus said, it sounds like you're getting the shaft.

[cruelpupet]

I don't think closing costs in that range are something I've EVER expected. I'm on the low end of your scale. I also have NEVER gone through a broker because their fees have always been LOTS higher than a regular old bank. (Maybe that's how yours got so high??) Are you having to fund an escrow account too at closing? I've never had to escrow taxes and insurance. Just trying to think of some areas where your closing costs would be higher, but like Daedalus said, it sounds like you're getting the shaft.

Yes the broker was 6k, but the escrow was rolled over from the previous. Maybe we temp funded it for a few days, but I dont think we had to.

[Prngr44]

Rates dropped some more at my bank, but I think I'm going to do a 180 on refinancing into a 15.

I'm going to refi back into a 30, keep setting aside the same amount of my normal payment each month, and invest the difference (~600/month)

I've ran a bunch of scenarios, and short of full on armageddon should still come out way ahead on the backend.

[cruelpupet]

I don't think closing costs in that range are something I've EVER expected. I'm on the low end of your scale.

A friend who is now looking to buy a place in the low 500k range with a 30y fixed residential mortgage was told to expect $15k in closing costs, so maybe its a NYC thing.

[renovation]

just talked to a broker today to get pre approved .its a friend so we see what he offers me in the next couple of day. IM exspect around 3.75 or less and 0 points.
he knows it be 30 plus days before I even start going home shopping . it may turn out we could do a refi. on are home here and use it to get the new place .im not to keen on this idea and he not even said a word about doing that. i did say we put 20 % down on what ever we found do.

[renovation]

i'll get word monday on we we stand on a loan. not worryed but you never know !

[cruelpupet]

Ive seen some discussion (probably on the FW finance forum) about getting super low rate home equity loans as a way of buying a second home without closing costs

[renovation]

Ive seen some discussion (probably on the FW finance forum) about getting super low rate home equity loans as a way of buying a second home without closing costs

im old school i guess but won't do a home equity loan. I would do a new first morgage (refi) on my main home to get the cash for the second home. but won't do a second morgage . same thing when it comes to a home improvement loan will not take one when offered. to me there the same as a second morgage to .

[Prngr44]

I close on the 4th. When I locked into my 30 yr rate, it was 3.25. The 20 was 2.75 and the 15 was 2.5.