Notices

Refinance question

Old 06-30-2013, 09:43 AM
  #1  
Senior Member
Thread Starter
 
Join Date: Aug 2012
Posts: 220
Likes: 0
Received 0 Likes on 0 Posts
Default Refinance question

Who has refinanced their home?

I'm interested in doing mine to help save some money from month to month. I currently have a 4.275 rate which is 30yrs fixed. I am only 3 years into my loan so I believe now would be the time to refinance.

What would you suggest? Where is the best place to start?
Old 06-30-2013, 10:00 AM
  #2  
Senior Member
 
Join Date: Feb 2008
Posts: 1,020
Likes: 0
Received 376 Likes on 201 Posts
Default

Rates are going up.......re-fi to a 20 or 25 year term ASAP. You'll cut a couple of years and lower your rate. Get at least 3 different quotes, but start at a local bank or credit union.
Old 06-30-2013, 10:07 AM
  #3  
THT SponsorCaptains Club Member
THT sponsor
 
Join Date: Mar 2007
Location: Wisconsin And Marathon,Fl
Posts: 9,303
Received 2,614 Likes on 1,180 Posts
Default

You might be a week late on the lowest rates.
Old 06-30-2013, 10:10 AM
  #4  
Senior Member
 
Join Date: Jun 2010
Location: CT
Posts: 883
Received 26 Likes on 20 Posts
Default

Not sure you will save a lot of money as the refi will cost you money and you might only be 1/2 or 3/4 of a point less. Might not be worth the cost of refi as rates are now going up. I refi at 3.50 for 25 years in January.
Old 06-30-2013, 10:12 AM
  #5  
Senior MemberCaptains Club Member
 
Join Date: Jan 2006
Location: Mobile, Alabama
Posts: 2,855
Received 177 Likes on 86 Posts
Default

Closing costs can make it not worth it. How long are you planning on keeping the house?

4.275% is a good rate. Go back to your current lender and see if they will waive some of the fees.
Old 06-30-2013, 10:27 AM
  #6  
Senior MemberCaptains Club Member
 
Join Date: Aug 2006
Location: Central Florida
Posts: 8,400
Received 1,008 Likes on 548 Posts
Default

Rates really jacked up the past week to 10 days. That 4.25% 30 year rate is pretty good as of today.
Old 06-30-2013, 11:41 AM
  #7  
Senior Member
Thread Starter
 
Join Date: Aug 2012
Posts: 220
Likes: 0
Received 0 Likes on 0 Posts
Default

Sounds like I may be late lol...story of my life. I work for government so maybe ill start with are credit union. Worst case is that I keep what I have which is not to bad.

I plan on staying in this house for at least another 20-25 years. When I bought it I planed for a growing family and for the future. So it meets my needs now and for the years to come.

The main goal I have is to save money over the term of the loan and count on the money ill save for more money in my pocket later.
Old 06-30-2013, 11:51 AM
  #8  
Admirals Club Admiral's Club Member
 
Join Date: Oct 2009
Location: FL Gulf Coast & NYC
Posts: 2,681
Received 243 Likes on 115 Posts
Default

I closed Friday on a refi. I went from 4.875% on a 30 year (3.5 years into it) to 2.65% on a 15 year. As has already been mentioned, rates have climbed in the past few weeks. I wouldn't be able to lock-in 2.65% today without paying points.

A general rule of thumb is that it takes at least a 1% reduction in the rate to make a refi worthwhile. Also, a 15 year note will generally have a lower rate than a 30 year note.

It doesn't hurt to shop around and see what rate you can get but you might be better off simply adding extra to each monthly payment. As long as your current loan has no early repayment penalty, they must allow you to apply extra monies specifically to principal reduction. On top of that, your processor may allow you to set up no cost bi-weekly payments. Doing so will automatically result in paying one additional payment each year. Normally, you make 12 monthly payments. With bi-weekely payments, you'll make 26 payments each year. Twenty six divided by two is 13...resulting in one extra yearly payment. Divide your monthly payment by 12 (assuming you're not escrowing) and add that amount to each monthly payment. Or half that amount to each bi-weekly payment. This will result in the equivalent of two additional payments each year.

The added benefit of paying extra is that you're not required to do so. In other words, if you fall on hard times, you can simply make your normal payment with no penalty. If you refinance into a 15 year note, you will have a lower rate, but a higher monthly payment that you must pay.

Play with the numbers here.

Tipsy
Old 06-30-2013, 12:28 PM
  #9  
Senior Member
Thread Starter
 
Join Date: Aug 2012
Posts: 220
Likes: 0
Received 0 Likes on 0 Posts
Default

I thought about a 15yr but its nice having the lower payments. I pay on average a few hundred extra on the principal each month which is going to save some years and money. Maybe ill just keep doing that or step it up a bit.

I should probably take the wife with me and talk to a financial advisor or something. I would consider us both good with money ie(paying bills on time/have money for extras left over) but not good in the getting ready for a solid retirement. We both work in gov and will get pensions but who knows what will happen to that with the way the economy is going.
Old 06-30-2013, 12:47 PM
  #10  
Senior Member
 
Join Date: Dec 2010
Location: Satellite Beach, FL
Posts: 10,745
Received 853 Likes on 410 Posts
Default

The time was 9 months ago
Old 06-30-2013, 01:28 PM
  #11  
Senior MemberCaptains Club MemberPLEDGER
 
Join Date: Sep 2004
Location: Poquoson, VA
Posts: 4,236
Likes: 0
Received 54 Likes on 21 Posts
Default

did mine 7 months ago 2.75% still make the same pre-refinance payment (which equals about 8 extra principle payments a year) will be done in 9.5 years...
Old 06-30-2013, 04:31 PM
  #12  
Senior Member
 
Join Date: May 2013
Location: LA (Lower Alabama)
Posts: 443
Likes: 0
Received 0 Likes on 0 Posts
Default

We just refinanced ours to go from a 6% to a 2.75%, but it was a friggin' nightmare.
First, the appraisal revealed just how wrong I was to think "you can't lose money with real estate."
Lost 20% of our equity in lower property value. Thank god our ratio was still OK to qualify for another VA.
The icing on the cake was that it took more than 3 MONTHS to get to closing.
Thanks to the apparently inexperienced people handling our loan at NFCU, where it seemed no one had ever handled a refinance in their careers since they screwed up nearly every single part of the process!
Old 06-30-2013, 05:26 PM
  #13  
Senior Member
 
Join Date: Jan 2008
Location: Garden City, SC
Posts: 1,940
Likes: 0
Received 1 Like on 1 Post
Default

As others mentioned you missed the boat on historic low interest rates. It sounds like shortening the term is not an option for you. If I were you I would stay with the current loan, and make 1 or more additional payments per year. It will knock years of interest payments off the mortgage.
Old 06-30-2013, 06:35 PM
  #14  
Senior MemberCaptains Club Member
 
Join Date: Dec 2007
Posts: 15,750
Likes: 0
Received 653 Likes on 359 Posts
Default

I'm 65, and anything below 6% is about right for a good rate. What we've seen in the early 80's was around 15%....

IMO, do the re-fi on a 30 year with option to pay extra on the principle whenever you want to.

If you fall on hard times, you will still need to pay that contracted amount, but you can also expect more and more of your payment to go towards the Equity if you pay extra.
Old 06-30-2013, 08:22 PM
  #15  
Senior Member
 
Join Date: Jan 2011
Location: Retired Bizy Livin
Posts: 8,047
Received 1,407 Likes on 998 Posts
Default

Originally Posted by Sprockets View Post
Rates really jacked up the past week to 10 days. That 4.25% 30 year rate is pretty good as of today.
what he said.
Old 06-30-2013, 08:26 PM
  #16  
Senior Member
 
Join Date: Jan 2011
Location: Retired Bizy Livin
Posts: 8,047
Received 1,407 Likes on 998 Posts
Default

Originally Posted by nunjabusiness View Post
First, the appraisal revealed just how wrong I was to think "you can't lose money with real estate."
Lost 20% of our equity in lower property value. Thank god our ratio was still OK to qualify for another VA.
yes sir you can say that again. Only hope is this spike in rates will get people off the bubble. If not I am afraid this may be the norm for sometime to come.
Old 06-30-2013, 08:29 PM
  #17  
aln
Senior Member
 
Join Date: May 2004
Location: West America
Posts: 3,669
Received 64 Likes on 48 Posts
Default

4.25 is a great rate historically.
Old 07-01-2013, 03:59 AM
  #18  
Senior MemberCaptains Club Member
 
Join Date: Aug 2006
Location: Central Florida
Posts: 8,400
Received 1,008 Likes on 548 Posts
Default

I've already posted twice here, but my advice is to sit tight but keep an eye on interest rates. The rates only moved up because the Fed said "at some point, if conditions merit, they will reduce the amount of bonds they are buying". A few negative economic reports and rates could easily drop back down. Get all your financial info organized so you can apply within a few days if this happens.

Personally, I've been in a strange position on our mortgage. We are 10 years into what was originally a 7/1 ARM. The past 3 years our rate has been right at 3%. Because values dropped, LTV was around 85-90%. It didn't make sense to refi due to the costs and the fact that our current rate would have risen. Values have recovered and LTV is now 65-70%. Our loan is based on 1 year LIBOR + 2.25. If it adjusted today, the rate would be under 3%. LIBOR has not risen along with mortgage rates.
Old 07-01-2013, 04:44 AM
  #19  
Admirals Club Admiral's Club Member
 
Join Date: Nov 2007
Location: Long Island, NY
Posts: 9,444
Received 941 Likes on 593 Posts
Default

Originally Posted by Scope3334 View Post
I currently have a 4.275 rate which is 30yrs fixed. I am only 3 years into my loan so I believe now would be the time to refinance.

What would you suggest? Where is the best place to start?
Your 4.25% rate is lower than the current average (4.46%), so you aren't going to do any better than you have now; and that is without adding in closing costs.
You missed it by 45 days - in mid-May you could have gotten 3.25%, not any more.
The only way you are going to save money is going to a 15 year, and even those are up to 3.5%, up from 2.75% in mid-May.
Old 07-01-2013, 05:19 AM
  #20  
Senior Member
 
Join Date: Jan 2011
Location: Retired Bizy Livin
Posts: 8,047
Received 1,407 Likes on 998 Posts
Default

Originally Posted by Sprockets View Post
"at some point, if conditions merit, they will reduce the amount of bonds they are buying".
I am hoping they run out of ink

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.