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Should I refinance?


BuffJim

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23 years left on my 30 year mortgage. Interest rate in the 3.5% range. Still paying over $140 per month in insurance. Loan is approx 65% of current value. Would switch to 15 years. BuffCarla wants to move in a couple years, but we’ll see. 
How big a hassle is the refi process?

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16 minutes ago, BuffJim said:

How big a hassle is the refi process?

Not bad, at least from when I did mortgages 23 years ago.  If you can do a no-cost refi, lose the PMI, and switch to a lower rate, you are ahead of the game.  At the very least, you would save the $140/month.  Saving $1,680 a year for a few hours of work is cheap lawyer money, definitely take a look, and it sounds like you could save more or gain greater equity in the few more years you'd have the place.  Also, the "few years" you are planning to stay could easily become five or ten years.

I'd think about it, at least.

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They are getting easier with much of the process being done online now. 

I work for a direct lender and business is booming. Lots of folks taking advantage of the low rates.  We had a friends & family program going for a while where they waive some of the costs if referred by an employee.  I can take a look on Monday if it’s still being offered  & PM you my info so you can note me on the application if you are interested.

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23 minutes ago, ChrisL said:

They are getting easier with much of the process being done online now. 

I work for a direct lender and business is booming. Lots of folks taking advantage of the low rates.  We had a friends & family program going for a while where they waive some of the costs if referred by an employee.  I can take a look on Monday if it’s still being offered  & PM you my info so you can note me on the application if you are interested.

Sure!

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The bank that held our mortgage contacted us about a refinance at a lower rate. It was complicated and they added a lot of charges that they didn’t tell us about. Since we were not selling the house it eventually saved us money but had we sold within a year or to it would have been a loss. You have to be very aware dealing with banks and snakes.

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2 hours ago, BuffJim said:

23 years left on my 30 year mortgage. Interest rate in the 3.5% range. Still paying over $140 per month in insurance. Loan is approx 65% of current value. Would switch to 15 years. BuffCarla wants to move in a couple years, but we’ll see. 
How big a hassle is the refi process?

I think if you're paying PMI, then it makes sense.  Remember, you don't get those 7 years back on the loan -- it'll reset to 30 -- so maybe look at a 15 year loan if you're looking to pay it off.  Some have 20 year refinancial options but those probably can't be found online.  We found Quicken or Rocket Loans online to be super easy and as competitive as anyone.  But they only do 30 or 15 year terms.

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2 hours ago, BuffJim said:

23 years left on my 30 year mortgage. Interest rate in the 3.5% range. Still paying over $140 per month in insurance. Loan is approx 65% of current value. Would switch to 15 years. BuffCarla wants to move in a couple years, but we’ll see. 
How big a hassle is the refi process?

If you're going to move in a couple years, you have to get a low- or no fees- refinancing and also check if there's a penalty for paying it off very early.

If you're unsure of moving, it still probably makes sense if the fees are low.

I never had much of a hassle or too much paper work when I refinanced.  The first time there was a big rush nationwide and the problem was getting an appointment with the bank's appraiser to come out and check out the house.  I refinanced 2 years into a 30 year mortgage and switched to a 15 year mortgage when the rates dropped from 9.5% to 6.625% in 1993. The fees weren't awful, but the percentage was so great it was a no-brainer in any case. Then I got an offer from Wells Fargo when I had about 5 1/2 years left in 2003 for a 4-year mortgage at 5.4% where the fees where something like $280 total, no appraisal needed, so it was worth it. It was a weird mortgage and had no escrow account: I paid my insurance and property taxes on my own.

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1 hour ago, Zackny said:

Our mortgage was originally 20 years. Paid it off in under 12. Don’t miss it a bit😁

When I had my concussion, that really scared me.  It made me realize being responsible for a mortgage when I was temporarily disabled...was just heart-stopping.  So when I recovered 5 months later, I paid off the mortgage in 1 year.

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Hey @BuffJim I PM’d you with some follow up.

We do offer a referral program and there are some good discounts depending on the program you qualify for.  There is nothing in it for me, only for you so no obligation whatsoever. If you find a better deal elsewhere I'm not out anything.

If anyone else is interested just PM me your name & email and I’ll send you the contact info for our lending officer who manages the program.

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You should if only to dump the mortgage insurance payment. That’s for the benefit of the lender. Your LTV doesn’t require PMI, why would you pay for something that holds no benefit for you. If you don’t refinance, at least write to the lender to cancel the pocket picking practice.

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4 minutes ago, Old No. 7 said:

You should if only to dump the mortgage insurance payment. That’s for the benefit of the lender. Your LTV doesn’t require PMI, why would you pay for something that holds no benefit for you. If you don’t refinance, at least write to the lender to cancel the pocket picking practice.

Yeah - PMI is a bit of BS, and one folks should generally avoid. 

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7 minutes ago, Razors Edge said:

Yeah - PMI is a bit of BS, and one folks should generally avoid. 

Never had to pay it with a VA loan. When I refi’d we didn’t need it.  

We are under 10 years on our Mortgage and not sure if it makes sense now to refi as we are pretty close to the current rate having done so the last time interest rates where really low and being close to pay off.  

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3 minutes ago, ChrisL said:

Never had to pay it with a VA loan. When I refi’d we didn’t need it.  

We are under 10 years on our Mortgage and not sure if it makes sense now to refi as we are pretty close to the current rate having done so the last time interest rates where really low and being close to pay off.  

Yeah, when we were buying our first place, it was our first introduction to PMI.  We asked what it was and figured it out, and opted for a larger down payment.  We didn't have any idea what it was, but when we did, we were like "why would we pay this?".  

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Just now, sheep_herder said:

Sounds like they don't require appraisals now. That was the biggest road block for us 'many years ago'. Getting ready for one of those is a PITA for us.

Quicken Loans essentially took appraisals by looking values up on Redfin.  The guy noticed our house was close to what I thought it was based on some other similar sized properties in the area and he agreed (that was how I calculated my value).  I was very skeptical of this online process but in the end -- it was the easy and best way to refinance.  I highly recommend it.

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2 minutes ago, Dottles said:

Quicken Loans essentially took appraisals by looking values up on Redfin.  The guy noticed our house was close to what I thought it was based on some other similar sized properties in the area and he agreed (that was how I calculated my value).  I was very skeptical of this online process but in the end -- it was the easy and best way to refinance.  I highly recommend it.

Sounds good, but not a problem I am facing on either place. 

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16 minutes ago, Razors Edge said:

Yeah, when we were buying our first place, it was our first introduction to PMI.  We asked what it was and figured it out, and opted for a larger down payment.  We didn't have any idea what it was, but when we did, we were like "why would we pay this?".  

When I was a young up & coming manager I bought about the same time  3 other managers bought.  One day we were comparing interest rates & such and they asked me how much my PMI was?  PM what?? They said surely you have to pay PMI? Nope, don’t even know what it is... How in the hell did you get away with not paying it?!!!

Right about them our boss, a retired Marine Full Bird Colonel bellows from his office, he’s exempt having served our country & using his VA benefit.  If you want to cry about PMI then you should have served your country first!!!

That shut them up! 

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1 hour ago, sheep_herder said:

Sounds good, but not a problem I am facing on either place. 

There's great rates out there right now.  Almost enough for me to refinance again -- and I just did.  They will never be better.  But even so, they don't make financial sense for me to do it.

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I don't get refinancing unless one can't pay off the remaining small mortgage in 1 lump payment.  Unless the mortgage interest goes back into your bank account and you won't die too early (and hence bank takes over house)... I don't see advantages when one is in their 50's, not to just pay off small mortgage (if it is small) after lst mortgage term is done.

I guess I sound pretty dumb right now.

I haven't had a mortgage in past 3 yrs.

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7 hours ago, shootingstar said:

I don't get refinancing unless one can't pay off the remaining small mortgage in 1 lump payment.  Unless the mortgage interest goes back into your bank account and you won't die too early (and hence bank takes over house)... I don't see advantages when one is in their 50's, not to just pay off small mortgage (if it is small) after lst mortgage term is done.

I guess I sound pretty dumb right now.

I haven't had a mortgage in past 3 yrs.

Small?  Who?  Refi can help on large loans and early on.  Or if you reduce your term from say 30 years  to 15.  But here's the other thing some of you forget.  If DeathJim refi's his 22 year mortgage to a much lower rate then just because it's reset to 30 years does not mean he can make extra payments now that he has extra cash.  I'd have to do the math but if he resets it -- he's monthly payment will drop significantly and if he makes 2 or 3 extra payments a year, that 30 years is going to drop back down to like 22.  So why bother if it's close to a wash?  Because on the months he's tight he doesn't have to sweat it and on the months he's plush he can pay down the principle.  

At 22 years, he's probably pretty close to being ok either way.  Again he would need a real estate refinancial calculator but I myself like the extra freedom it gives you and let's you decide when and how to spend that extra money.  Choices.

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14 hours ago, Dottles said:

Small?  Who?  Refi can help on large loans and early on.  Or if you reduce your term from say 30 years  to 15.  But here's the other thing some of you forget.  If DeathJim refi's his 22 year mortgage to a much lower rate then just because it's reset to 30 years does not mean he can make extra payments now that he has extra cash.  I'd have to do the math but if he resets it -- he's monthly payment will drop significantly and if he makes 2 or 3 extra payments a year, that 30 years is going to drop back down to like 22.  So why bother if it's close to a wash?  Because on the months he's tight he doesn't have to sweat it and on the months he's plush he can pay down the principle.  

At 22 years, he's probably pretty close to being ok either way.  Again he would need a real estate refinancial calculator but I myself like the extra freedom it gives you and let's you decide when and how to spend that extra money.  Choices.

My longest home mortgage has been about 7 years.

Yea, I get obsessed about saving money and paying off early.

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