Mortgage refi question

[PleaseBlitz]

4 minutes ago, The Sisko said:

Does that make it illegal advice though @PleaseBlitz?😁

 

I charge for that answer. 

[The Sisko]

2 minutes ago, PleaseBlitz said:

 

I charge for that answer. 

Put it on my account...on account of I ain't got no money.

 

[Springfield]

1 hour ago, PleaseBlitz said:

 

 

What is the rate on your house?  If you already refinanced last year like everyone should have, then you should put the money into a managed asset account that will earn you 8 or 9 percent rather than pay of your mortgage which only costs you 3% or so.  Unless you have actual cash flow issues, and then yea, pay down the debt in whatever order you want. 

we refi’ed in Feb 2020 RIGHT before Covid hit and the rates took a nose dive. Right now we are sitting at 3.625% so I could probably shave a little off but I’m not sure if it’s worth it to refi just for the rate change alone.

[PleaseBlitz]

5 minutes ago, Springfield said:

we refi’ed in Feb 2020 RIGHT before Covid hit and the rates took a nose dive. Right now we are sitting at 3.625% so I could probably shave a little off but I’m not sure if it’s worth it to refi just for the rate change alone.

 

Yea, I feel you.  I refi'd in March 2020, then had to refi again in July because rates have gone down so much.

 

The way the math works is you figure out how long you plan to stay in the house, in months.  Then you figure out how much the refinance will save you monthly.  Then you divide the closing costs by that monthly savings.  

 

So if you plan on staying for 5 more years (60 months) and the refi will save you $200/mo on your payment but cost you $4000 in closing costs, then your break even point is in 20 months and you plan on staying longer than that so you should do the refi.  

[Springfield]

7 minutes ago, PleaseBlitz said:

 

Yea, I feel you.  I refi'd in March 2020, then had to refi again in July because rates have gone down so much.

 

The way the math works is you figure out how long you plan to stay in the house, in months.  Then you figure out how much the refinance will save you monthly.  Then you divide the closing costs by that monthly savings.  

 

So if you plan on staying for 5 more years (60 months) and the refi will save you $200/mo on your payment but cost you $4000 in closing costs, then your break even point is in 20 months and you plan on staying longer than that so you should do the refi.  

Got it. Thanks for the input, I value it.

[gbear]

I reccomend quicken loans. They shop around to find what you are looking for. Dont the yourself to one lender if you can help it unless there is some reason to be loyal to them, like family deal. You arent tied to quicken by calling them, but see what they can find for you. We have used them twice with good results.

Edited April 23, 2021 by gbear

[purbeast]

So we closed on our refinance today and I had absolutely no ****ing clue that we get to skip a month's mortgage payment.  Our first payment isn't due till June 1st and we don't pay **** for May.  

 

Perfect timing since we going to St. Thomas on May 7th.

 

6 hours ago, Springfield said:

we refi’ed in Feb 2020 RIGHT before Covid hit and the rates took a nose dive. Right now we are sitting at 3.625% so I could probably shave a little off but I’m not sure if it’s worth it to refi just for the rate change alone.

Dude we were on a 30yr at 3.875% I think and now we're on a 15% at 1.625%.  It makes a HUGE difference.  It's more than "shaving a little off".

 

We had 22 yrs left on the 30yr and now we have 15yrs left and are only paying $10/month more.

Edited April 24, 2021 by purbeast

[mammajamma]

Just now, purbeast said:

So we closed on our refinance today and I had absolutely no ****ing clue that we get to skip a month's mortgage payment.  Our first payment isn't due till June 1st and we don't pay **** for May.  

 

Perfect timing since we going to St. Thomas on May 7th.

you may have paid extra interest to your previous lender in your refi closing docs, which would fill that gap

[purbeast]

47 minutes ago, mammajamma said:

you may have paid extra interest to your previous lender in your refi closing docs, which would fill that gap

Nah I looked at the breakdown.  We're using the same company to refinance with too.

 

 heard that this is normal though for refinancing.  I just had no clue about that since I've never done it.

 

I did just wire $10k for closing costs though.  That was kind of odd.  Felt like I was getting scammed lol.  Never done it before.  

[mammajamma]

1 minute ago, purbeast said:

Nah I looked at the breakdown.  We're using the same company to refinance with too.

 

 heard that this is normal though for refinancing.  I just had no clue about that since I've never done it.

 

I did just wire $10k for closing costs though.  That was kind of odd.  Felt like I was getting scammed lol.  Never done it before.  

Gotcha. Yeah it's usually normal (depending on your closing timing in the month) for that to happen with refi's and purchasing a house. I got that "month off" both when I bought my house and my refi

[purbeast]

1 minute ago, mammajamma said:

Gotcha. Yeah it's usually normal (depending on your closing timing in the month) for that to happen with refi's and purchasing a house. I got that "month off" both when I bought my house and my refi

Damn we may have got that too when we bought it.  I just don't remember since it was in 2012.  Either way it's sweet cause I was also paying $1k more.

[Springfield]

10 hours ago, purbeast said:

So we closed on our refinance today and I had absolutely no ****ing clue that we get to skip a month's mortgage payment.  Our first payment isn't due till June 1st and we don't pay **** for May.  

 

Perfect timing since we going to St. Thomas on May 7th.

 

Dude we were on a 30yr at 3.875% I think and now we're on a 15% at 1.625%.  It makes a HUGE difference.  It's more than "shaving a little off".

 

We had 22 yrs left on the 30yr and now we have 15yrs left and are only paying $10/month more.

 

Wow that's amazing. Might be something we can look into as well.

[goskins10]

16 hours ago, gbear said:

I reccomend quicken loans. They shop around to find what you are looking for. Dont the yourself to one lender if you can help it unless there is some reason to be loyal to them, like family deal. You arent tied to quicken by calling them, but see what they can find for you. We have used them twice with good results.

'

 

I hope you looked really close to the fees. Quicken Loans is famous for embedding huge fees into the mortgage. As I said earlier I found a $9000 fee hidden in the disclosures - when I say hidden, its there but not where you expect it and they give it a name that is intended to keep you from asking questions unless you read every line carefully. Or they repeat the same fee but in separate parts of the disclosures hoping you don't realize it's listed twice. 

 

Not saying you did this or it happened to you and if you got a good deal from them, that's great! Just be careful. They are notorious for predatory lending practices as mentioned above. 

[dfitzo53]

Damn, just played around with LenderFi and we need to refinance.

[Warhead36]

How low rates are you guys seeing? Is 2% feasible with a private broker? I think even BoA is offering 2.25.

[PleaseBlitz]

1 hour ago, dfitzo53 said:

Damn, just played around with LenderFi and we need to refinance.

I’ll PM you my guys contact info. 

1 hour ago, Warhead36 said:

How low rates are you guys seeing? Is 2% feasible with a private broker? I think even BoA is offering 2.25.

No, probably about 2.5% right now. 

[techboy]

22 hours ago, PleaseBlitz said:

 

Don't lie, you learned about LenderFi right here on ES, over a year ago. 🤪

 

That's funny... I actually did pretty well with Lenderfi but I didn't refi until July of 2020... If I had played around with it earlier I might have done better.

21 hours ago, PleaseBlitz said:

 

It's managed by my financial advisor brother and is at 10/10 on the aggression scale (I don't know how much, but some of it is in crypto).   It also does better than 8% but I figured hat is what a regular person could get.  This is not my retirement fund, which is a Vanguard account through work, so I'm good with the risk and am still pretty far away from needing it. 

 

Leaving aside my thoughts about active management, historically 8% is about what the stock market has returned as a whole, in nominal terms. The reason I'd be cautious about that going forward is that the traditional valuation models seem to indicate much lower future returns for stocks, especially US. Here's one example: https://www.prnewswire.com/news-releases/vanguard-publishes-2021-economic-and-market-outlook-report-301189486.html

 

I've seen some argue that other new factors make the traditional models too conservative, but I certainly wouldn't  RELY on higher returns going forward, particularly if it's money that's needed for something. This is possibly going to be a big problem for state and local pension plans... they bake in rather large return assumptions to avoid unpleasant tax or benefit discussions, and base it on historical equity returns, but that may or may not be sustainable. 

35 minutes ago, PleaseBlitz said:

No, probably about 2.5% right now. 

 

I got 3% in July of 2020, and this thread made me look today. Our loan amount puts us right on the edge of where refinancing makes sense, but it's not quite to the no brainer area where I'd pull the trigger immediately. I'd almost rather rates went back up so I don't have to debate it with myself any more. I missed the some of the biggest dips because I was still in the 6 month window after closing, unfortunately. This is where Google didn't do me any favors, throwing me stories in my news feeds about historically low rates.

[Corcaigh]

What's a mortgage?

[The Evil Genius]

Jeez they must be hurting for biz. Did a request quote through Costco finance (they act as a middleman for multiple companies) and got 2 calls and several emails within 10 seconds of submitting.

 

We are at a 3.625 on a house that has about a 50% LTV ratio (value up 200k+ since we bought it in 2016). 😁

 

No plans to sell so thinking a 20yr under 3% makes sense right? 

[PleaseBlitz]

3 hours ago, The Evil Genius said:

Jeez they must be hurting for biz. Did a request quote through Costco finance (they act as a middleman for multiple companies) and got 2 calls and several emails within 10 seconds of submitting.

 

We are at a 3.625 on a house that has about a 50% LTV ratio (value up 200k+ since we bought it in 2016). 😁

 

No plans to sell so thinking a 20yr under 3% makes sense right? 

 

You should be able to get well under 3% for a 20 year fixed at that LTV, I'd keep shopping.  

[The Evil Genius]

36 minutes ago, PleaseBlitz said:

 

You should be able to get well under 3% for a 20 year fixed at that LTV, I'd keep shopping.  

 

Was offered 2.75% for a 20yr fixed, with slightly less than 2k in total fees. 

 

Savings of 50k on interest if we keep chipping in the extra principal each month (like we are doing now) according to my amort table.

 

Should be a no brainer but I'm lazy. 😆

[PleaseBlitz]

21 minutes ago, The Evil Genius said:

 

Was offered 2.75% for a 20yr fixed, with slightly less than 2k in total fees. 

 

Savings of 50k on interest if we keep chipping in the extra principal each month (like we are doing now) according to my amort table.

 

Should be a no brainer but I'm lazy. 😆

 

Seems high to me.  If you are okay with getting bombarded with calls and emails for a few days, try LendingTree.  

 

Also, as noted by several folks in this thread, try LenderFi.com and Sofi.com.  

[techboy]

Heads up: rates seem to be down again and there's a screaming deal available as well... I'm refinancing again (which I figured would never happen after last time).

 

Here's the trick: Better.com doesn't generally have better rates, somewhat ironically, but they DO usually match offers from other lenders, so it's pretty easy to get them to the best rate available. 

 

That's important because right now they also have THIS offer: https://better.com/with/amex which on top of everything else, gives a $2000 statement credit on any personal American Express card ($6000 for jumbo). Apparently plenty of people have opened an amex just for the offer, and of course that's totally worth it.

 

It's been pretty easy... Following the path mentioned in this thread on Bogleheads, https://www.bogleheads.org/forum/viewtopic.php?f=2&t=289559&start=10550, I ran a search on Bankrate using my information. Better actually was the best option, so I screenshotted it making sure the time and date was visible. Then I applied through the Amex offer link, and Better ran a soft credit check, offering me a worse rate than advertised. I then emailed the contact provided when I applied with the screenshot, and he matched it. They'll also match other estimate sheets from other lenders (like Lenderfi, for example), but this was really easy and I didn't have to even apply anywhere else.

 

I'm now set to lower my rate a quarter point, clearing a roughly $500 profit after costs. taking into account the statement credit, which can either be spent down, or it's possible to request a check from Amex to resolve a credit like that after a little while.

 

Better is also pretty easy to use and everything is online including forms and signatures, so that's nice. I've read that they're great if you're "standard" (normal income, no other loans, etc.), but that things like self-employment or a home equity line can throw a wrench into things, so there's that to consider.

 

For those that need an Amex to get the offer, there are some good bonuses out there as well... https://frequentmiler.com/best-credit-card-sign-up-offers/ Probably want to apply for the credit card BEFORE they run the hard check, though... at that point it's just a matter of explaining the inquiry and new card at some point during the underwriting process.

[Ball Security]

1 hour ago, techboy said:

Heads up: rates seem to be down again and there's a screaming deal available as well... I'm refinancing again (which I figured would never happen after last time).

 

Here's the trick: Better.com doesn't generally have better rates, somewhat ironically, but they DO usually match offers from other lenders, so it's pretty easy to get them to the best rate available. 

 

That's important because right now they also have THIS offer: https://better.com/with/amex which on top of everything else, gives a $2000 statement credit on any personal American Express card ($6000 for jumbo). Apparently plenty of people have opened an amex just for the offer, and of course that's totally worth it.

 

It's been pretty easy... Following the path mentioned in this thread on Bogleheads, https://www.bogleheads.org/forum/viewtopic.php?f=2&t=289559&start=10550, I ran a search on Bankrate using my information. Better actually was the best option, so I screenshotted it making sure the time and date was visible. Then I applied through the Amex offer link, and Better ran a soft credit check, offering me a worse rate than advertised. I then emailed the contact provided when I applied with the screenshot, and he matched it. They'll also match other estimate sheets from other lenders (like Lenderfi, for example), but this was really easy and I didn't have to even apply anywhere else.

 

I'm now set to lower my rate a quarter point, clearing a roughly $500 profit after costs. taking into account the statement credit, which can either be spent down, or it's possible to request a check from Amex to resolve a credit like that after a little while.

 

Better is also pretty easy to use and everything is online including forms and signatures, so that's nice. I've read that they're great if you're "standard" (normal income, no other loans, etc.), but that things like self-employment or a home equity line can throw a wrench into things, so there's that to consider.

 

For those that need an Amex to get the offer, there are some good bonuses out there as well... https://frequentmiler.com/best-credit-card-sign-up-offers/ Probably want to apply for the credit card BEFORE they run the hard check, though... at that point it's just a matter of explaining the inquiry and new card at some point during the underwriting process.

What term and rate did you end up with?  Is this owner-occupied or investment?

[techboy]

29 minutes ago, Ball Security said:

What term and rate did you end up with?  Is this owner-occupied or investment?

 

I didn't post it because rates vary wildly based on exact location, loan size, etc, so the information is almost useless, but if you're interested I moved down to 2.75 for 30 years and it's my primary residence. Some will probably do better... My loan is relatively small which can make it less attractive.

 

 

Edited June 15, 2021 by techboy